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BigBobby2016 t1_isshyxh wrote

I wonder what the timeframe is for the typical skyscraper to become profitable? They certainly aren’t cheap and the rents require some time to make up for the cost.

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danteheehaw t1_issvykw wrote

I think they mean it was costing more to maintain than the income earned.

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BigBobby2016 t1_issyxa6 wrote

That does make sense. Cities and developers have been known to give buildings away when they cost more to maintain than they earned in income.

My old city actually gave their arena to a university because of this. That same year, they charged the city $10k to hold their HS graduation there…

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A_Soporific t1_isua8k6 wrote

Needless to say, it varies WILDLY depending on the style of construction and if it's commercial (Offices) or residential (apartments). Early 20th century skyscrapers tend to be massive commercial structures. Those going up now tend to be "super-slim" residential structures featuring whole-floor condos.

I don't know what the payback on a early 20th century style building would be today. But a modern "super-slim" like One57 or 220 Central Park South would cost about $1.6 billion, take roughly five years to build, and would recoup its expenses between two to three years after construction finishes since they are selling and not renting those condos.

So, if you're talking about the sort of skyscraper being built now in New York then roughly 7-8 years.

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Garrison1999 t1_issxcrk wrote

Yeah most businesses don't plan to become profitable immediately. Tesla is still not profitable after almost a decade. Even for small startups it can take several years. A project of this magnitude would require massive financing, so twenty years seems reasonable.

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OMQ4 t1_issxt2r wrote

From a quick google search:

“Tesla then took profitability to the next level when it announced a $1.19 billion profit in the second quarter of 2021 (with $354 million coming from credit sales). Tesla ended 2021 with a net income of $5.51 billion (a 665% increase from 2020).”

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Garrison1999 t1_issy4xj wrote

Okay fair, thanks for the info. My knowledge was out dated. My point still stands that it takes a while.

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OMQ4 t1_issyie4 wrote

100% , also Tesla has been around since 2003 and didn’t become profitable untill like a year ago… that’s crazy!

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A_Soporific t1_isuai9p wrote

They have yet to be profitable over the course of a year, but they have been profitable for a single quarter. It's really a value judgement if that counts or not.

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Mr-Tootles t1_iswzwrc wrote

As an accountant… it does not.

There are so many ways to fiddle with profit in one quarter. So many one off accounting adjustments that can happen.

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SkyeMreddit t1_isucniz wrote

The wiki article for the ESB said that at the time, skyscrapers were 50% occupied by the time they opened and 90% occupied within 5 years. Now, there are two types. They either wait for a big tenant to take more than half of the space before starting construction, or they build “on-spec” and it varies but lots of them become 85-90% occupied within a couple years unless there are unique problems with that specific building

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