Why would a company pay $250 per square foot when similar space is available for half the price a few blocks away?
I've heard that question throughout my career. The obvious answers are transportation, amenities, and address. But those answers have always felt incomplete to me.
Nobody pays a premium for marble in the lobby. They're paying for what they believe might happen after they move in. That's an important distinction, and one our industry doesn't talk about enough.
When Amazon ran its HQ2 process, 238 cities submitted proposals. The company wasn't shopping for square footage. It was betting that the right environment would change its trajectory, that the density of talent, relationships, and proximity to power would compound over time in ways no spreadsheet could fully capture. The building was almost beside the point. What they were buying was probability.
The best buildings don't guarantee better recruiting, stronger culture, or that your next breakthrough comes from the team down the hall. What they do is increase the probability that those things happen. The probability that exceptional people want to be there. That relationships form faster. That ideas move because the right people are in the same room.
We tend to forget that in commercial real estate. We underwrite cash flow, model absorption, and debate cap rates because numbers create the illusion that uncertainty can be managed. Those metrics matter, but they're backward-looking. They tell us what happened, not why.
The decisions that create long-term value are usually made years before they show up in any market report. When Related Companies invested in the public spaces and retail mix at Hudson Yards, those decisions didn't underwrite cleanly. They were betting that the right environment would attract the right tenants, people, and energy. No guarantee. Just better odds.
That's true at a much smaller scale, too. I've been thinking about it more personally as we built out our own new office this year. Many New Yorkers now spend more waking hours at work during the week than they do at home. That was top of mind as we considered the size and quality of the space, down to features like a wellness room. We weren't just thinking about where people would work. We were thinking about creating a place where they would actually want to be.
That's the calculation more owners and businesses are making now. The value of a space isn't only in what it provides. It's in the behavior, relationships, and experiences it makes more likely.
Developers don't create innovation, they create environments where innovation is more likely. Owners don't create culture, they create places where culture has a chance to develop. Cities don't build great companies, they increase the probability that ambitious people find each other and build something together.
Through that lens, a lot of decisions that look expensive start to make sense. The premium location. The activated lobby. The carefully chosen retail mix. None of it guarantees an outcome. Together, it improves the odds.
The longer I've been in this business, the less interested I am in what a building is worth today. I'm much more interested in what it makes possible tomorrow. That's the part that doesn't fit in a pro forma, and it's often where the real value gets created.
The best owners understand this. They stop asking what a building is worth today and start asking what it makes possible tomorrow. That's a harder question. It's also the only one that matters.
