What Starts Going Up Will Eventually Come Down... To Everyone

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Published on Thursday, 28 June 2012 08:00

Written by Ryan Cole, Editor, Small Cap Insider

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Skyscraper competition goes in phases. Nothing will happen for years -- decades -- and then, suddenly, the race will heat up, and a new building will break the old record every few years or so.

The late 1800s saw such a period, when the modern skyscraper was invented. The 1920s and '30s were a period of fierce competition -- and then the Empire State Building, built in 1931, held the title of world's tallest building for 40 years.

The mid-'70s saw modest competition with the World Trade Center and Sears Tower trading the title -- but the modern era of skyscraper building really began in earnest in 1998, with the completion of the Petronas Tower.

The Petronas Tower in Kuala Lumpur was one of the first buildings that went up under a new design structure -- the tubular design, created by Bengali engineer Fazlur Khan in the 1960s.

This new design has now mostly replaced the old steel-frame model, largely because it is much more efficient with building materials, much cheaper, and allows for greater creativity in designing skyscrapers.

For proof, just take a look at the sorts of buildings that are trading the title these days.

From the Taipei 101 -- designed to look like a stalk of bamboo and the tallest building for only six years...

... to the current record-holder, the Burj Khalifa in Dubai, which looks more like an upside-down icicle than anything else.

Thanks to the relatively inexpensive construction of modern skyscrapers, this competition could go on for quite some time, as developing economies vie to announce their presence to the world.

Or, it could speed up.

That's because, while the tubular design of modern skyscrapers is a major step forward for tall buildings, there's another new concept in building that's changing every type of structure -- from skyscrapers to ordinary houses.

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That new concept is the newest generation of prefabricated building.

In its simplest form, prefab building allows builders to just about entirely construct a new building in pieces, and then put it together onsite in a fraction of the time it would normally take.

For instance -- the Burj Khalifa took five years to construct.

The newest skyscraper planned to grab the world's tallest title -- in January 2013, in the capital of the Hunan province of China -- will take only 90 days to complete.

Plenty of experts are skeptical... but I'm not so sure. After all, the company leading the skyscraper's construction -- Broad Sustainable Building (BSB) -- was able to erect a 30-story hotel in only 360 hours:

Ninety-five percent of the building will be completed at BSB's factory, with the remaining 5% of work just assembling the pieces onsite like a giant jigsaw.

And, as you might guess from BSB's title, the new building will not only be cheaper to make and erect, but it will be more eco-friendly as well. Quadruple-glazed windows and super-thick concrete for insulation are just a few of the innovations put into the design.

This, of course, changes the game for skyscraper competition.

When you can build a structure so quickly -- and so "cheaply" (the BSB's Sky City One skyscraper will cost about $628 million) -- plenty of new contenders for the crown will enter the scene.

That's all well and good -- but I'm more interested in how this new generation of prefab construction will affect us in more prosaic ways. We could be entering a world where a house can be built in a week... or an entire community in a month.

We're entering a world where entire buildings can be printed out of 3-D machines and assembled afterward... and we may be entering a period where traditional builders get hammered, as their huge construction projects are no longer necessary.

And that's not even the most innovative thing going on in building architecture today.

Next Thursday, I'll take a look at some of the other advances going into new building -- and why these advancements might just be exactly the thing to turn the real estate market around.

We've been through the worst of it already. But a technological revolution is on our doorstep. We might see the best of it in the coming years.

From the Inside,

Ryan