Skyscraper Economics

Authentically the only skyscrapers worth while constructing in the congested business districts of Detroit, Chicago or Manhattan, where certain plots are worth about $400 a square foot, are those of 75 stories. In San Francisco, Los Angeles and Cleveland, where prize blocks are worth $200 a square foot, the most profitable buildings must be just 63 stories high. No building should be constructed that high in St. Louis, Boston, Philadelphia, Pittsburgh or lesser communities, because land values there are too low to warrant the expense. Their land is comparatively cheap because they have no need for the business congestion which would fill tall structures with occupants.

Authentic these facts are, for last week the American Institute of Steel Construction worked them out after a two-year study. Employed in the long study were William Clifford Clark, chief economist of S. W. Straus & Co., and a group of skilled architects, construction engineers, elevator engineers, steel men, electricians, plumbers, rental agents, building managers.

The architect, John L. Kingston of Warren & Whetmore, started with the idea of a good sized building constructed, theoretically, high up in the air. Then he planned downward to the street level, spreading lower stories to get the "setback" effect which gives tall buildings the maximum of light and air.

His steel colleagues told him he could run his building as high as he pleased. Their structural steel could stand any strain. The elevator men told him, however, not to go above 150 stories (2,000 feet high), because to travel higher would require too heavy elevator cables and because the cars would be required to travel more than 1,500 feet a minute. Although mine elevators travel faster than that, higher speeds bother the human ear drums, and passengers in commercial buildings would not endure discomfort. At present fastest buildings elevators go 750 feet a minute. So Mr. Kingston drew plans for several smaller buildings. For each type his co-workers figured construction and operating costs. Mr. Clark studied their information and discovered:

1) The best paying building should cover a whole block.

2) The higher a full-block building, up to 63 stories on $200-land and 75 stories on $400-land, the greater the percentage of return on investment in such a structure. The limit of profits is 10.25%. Beyond such heights, the investment returns diminish until, on $200-land, a 131-story building would return zero. A 132-story skyscraper would develop a loss.*

*The world's first skyscraper, i.e., building with a structural steel skeleton, was Chicago's 13-story Tacoma Building, constructed in 1892.