New Goldman Sachs Headquarters - 200 West Street - by Henry Cobb of Pei Cobb Freed

**jeffpark** · September 25th, 2006, 10:41 PM

in most cases the landlord pays for the TI (tenant improvements)

**Eugenious** · September 25th, 2006, 10:56 PM

Originally Posted by MrSpice

I am curious, why is this building so expensive? I hear this number - 2 billion dollars in construction costs. It does not even seem that big based on all those renderings. Does anyone know where all this money goes?

Goldman Sachs Group, Inc.

(Public, NYSE:GS) -

168.69 Open: 167.90 Mkt Cap: 72.82B P/E: 10.19 High: 169.42 52Wk High: 169.69 F P/E: 9.67 +1.17 (0.70%) Low: 167.00 52Wk Low: 110.23 Beta: 1.25 Sep 25, 4:00PM EDT Vol: 4.78M Avg Vol: 4.26M EPS: 17.10

Income Statement Quarterly

Total Assets 798,884.00

In Millions of USD
As of 2006-05-26

Any questions?

2 billion is not big money for Goldman, infact it's such a miniscule amount it's almost criminal...they could buy up all the unbuilt office space downtown if they wanted to.

**EugeneNYC** · September 25th, 2006, 11:25 PM

Seems like they've been working on the foundation for quite a while. Any ideas why it's taking so long?

**Jake** · September 25th, 2006, 11:33 PM

^yeah, labor unions! haha

**ZippyTheChimp** · September 25th, 2006, 11:54 PM

Originally Posted by EugeneNYC

Seems like they've been working on the foundation for quite a while. Any ideas why it's taking so long?

160 - 170 caissons to drill. That was finished last week, and now they're hauling out dirt.

Target for foundation completion is December.

**STR** · September 26th, 2006, 12:04 AM

Originally Posted by macreator

Since the Goldman Sachs building is being built as a one tenant headquarters building, the $2 billion pricetag includes everything -- trading floor equipment, thousands of computers, monitors, furniture, lighting systems, etc. in addition to the building itself.

In comparison, the pricetag for 7 World Trade, a somewhat similarly sized building if a lot skinnier, was just for the building itself and the lobby and did not include furnishings or computer systems because those things will be paid for by 7 WTC tenants and not Silverstein.

Basically, yes, they're two completely different beasts. GS is a corporate trophy building. Meaning, efficiency, functionality, responsiveness to company needs (upgradability), and long term value (in case of potential re-sale) are the important considerations, roughly in that order. Costs are last.

7WTC is a spec (short for "built on specification", RE term for a building built without a particular tenant in mind) office building. Cost is paramount, followed by openess. The latter means large, column free, generic floor plates that can be reconfigured for anything, which often requires the structure to handle having large holes (for staircases and more bizare requests). Those are the only requirements for a spec office. However, a developer can choose to add gimmicks/benefits to differentiate their product. 7WTC has the large windows, posh lobby and LEED rating.

The original WTC (which was the largest spec development ever) had the large floor plates, iconic design, massive mall, international trade services, transit links, the plaza and (eventually) the 800 room on-site hotel as the amenities. However, as time dragged on, the WTC lost its vision of being a spec office and became ever more the Port Authority's trophy complex, which lead to grander amenities.

The Empire State Building (also spec) had its extreme height and (for the time) large office plates as the main seller.

The Sears Tower and Chrysler Building are two more examples of corporate trophies. Sears, long noted for its massive 225 foot square base was a direct result of Sears' preference for large floors, due to their current HQ which was just 5 floors high but spread for several blocks of Chicago's West Side. These floors were fitted with state of the art equipment including robotic mail carriers. The towers famous assymetric setbacks were actually added to accomidate rental tenants, with the idea being Sears would eventually fill up the entire building. This makes Sears an odd hybrid mix.

However, the trophy part of the building hurts it as a tenant building today. Sears' plan to fill up the entire tower fell flat along with the companies sales. They never moved beyond the massive first 50 floors, until they moved out 15 years ago after a failed attempt to sell the building for $1 billion. Those massive lower floors are not desired by most tenants today (nor where they back when Sears moved out) as too much space is too far from windows. THe airy upper floors have, contrastingly, popular since day one. Not even post 9/11 fear was able to dislodge any of the tenants from their lofty perches. The 7 tenants that did leave the building were from the first 50.

Chrysler Bldg is, with its hub cap medallions and hood ornament gargoyles, an architectural commerical for the cars of the time. The large floors at the base were intended for Chrysler, which never moved in, while the narrow high floors were meant for tenants. Another hybrid with a program very similar to Sears.

**Vengineer** · September 26th, 2006, 12:49 AM

Also, LEED certification and building "green" helps to increases upfront costs rather dramaticatically. That is why 1 Bryant Park and GS along with 1 WTC yield a hefty price tag in the billions. When properly designed however, it should yield a payback period of less than 5 years.

**STR** · September 26th, 2006, 01:06 AM

I've read that Silver ratings only add 5 percent to the initial cost, while gold rating (the goal for the WTC) is another 5-10 percent or so. I don't call that significant and neither are developers, which are going LEED crazy.

**Vengineer** · September 26th, 2006, 01:29 AM

It's pretty drastic. You can believe your sources if you trust it but I would like to prefer my own, which include my pencil and keyboard which help me compile feasibility reports.

A case study in point... I recently studied the feasibility of adding a VFD (variable frequency drive) box to a motor running chiller equipment for the Moynihan station. It varies the current received by the motor depending on the changing load, be it night or day, winter or summer, rather than having it run constantly which obviously saves energy costs in the long run. This is a box roughly 3ft tall and 4 ft wide. I was amazed to find out that it costs $115,000 per unit. Each motor or pump requires a single VFD unit. Now that is a shitload of money considering how many motors and pumps there are in the facility. I specified 8 for a single mechanical room responsible for cooling just the intermodal hall and the main train hall. That's easily $1 million for trivial equipment that didn't really need to be there. The cost was roughly 30% of the motor or pump it is trying to optimize. I don't believe Moynihan is even going for LEED certification. 5% seems like a marketing figure...

... in my opinion.

**pianoman11686** · September 26th, 2006, 01:46 AM

Yes, but isn't Moynihan a nearly $1 billion-dollar project?

1 million dollars sounds like a drop in the bucket compared to that. Are there $49 million dollars worth in other LEED stuff that would certify the building?

**LeCom** · September 26th, 2006, 02:58 AM

Originally Posted by Derek2k3

June 27, 2006
DMurrow's photostream

Great shot, but it also shows how much of a mess West Street is. Something definitely has to be done to it, like a park strip in the middle.

**pianoman11686** · September 26th, 2006, 03:14 AM

^Sounds like a waste of money and space. Why not a light-rail system?

**STR** · September 26th, 2006, 10:35 AM

Originally Posted by Vengineer

It's pretty drastic. You can believe your sources if you trust it but I would like to prefer my own, which include my pencil and keyboard which help me compile feasibility reports.

A case study in point... I recently studied the feasibility of adding a VFD (variable frequency drive) box to a motor running chiller equipment for the Moynihan station. It varies the current received by the motor depending on the changing load, be it night or day, winter or summer, rather than having it run constantly which obviously saves energy costs in the long run. This is a box roughly 3ft tall and 4 ft wide. I was amazed to find out that it costs $115,000 per unit. Each motor or pump requires a single VFD unit. Now that is a shitload of money considering how many motors and pumps there are in the facility. I specified 8 for a single mechanical room responsible for cooling just the intermodal hall and the main train hall. That's easily $1 million for trivial equipment that didn't really need to be there. The cost was roughly 30% of the motor or pump it is trying to optimize. I don't believe Moynihan is even going for LEED certification. 5% seems like a marketing figure...

... in my opinion.

Well, I'll take your opinion over USA Today's. Which ever the number (which really isn't important, nor do I think our numbers are mutually exclusive (machinery could be 30% more expensive while costs for other parts are the same as a regular building)) the point is that it IS economical for the developer and the tenant. Which is why its is taking off, as opposed to green building attempts in the past which where mostly show pieces or test beds.