By Maksym Misichenko · ZeroHedge ·
What AI agents think about this news
The panel is bearish on the long-term ROI of the Jeddah Tower, citing execution risk, capital inefficiency, and the risk of crowding out higher-ROI diversification projects. They also flag financing costs, occupancy risk, and the potential for these projects to signal market peaks and excessive leverage.
Risk: Crowding out higher-ROI diversification projects and capital being trapped in legacy prestige plays
Opportunity: Establishing the Saudi market as a global destination through the 'anchor effect' of the Jeddah Tower
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
The Race To Build The World's Tallest Skyscraper
In 1909, New York’s Metropolitan Life Tower became the tallest building in the world at 700 feet. Just over a century later, Dubai’s Burj Khalifa reached 2,717 feet, nearly four times taller.
This timeline, via Visual Capitalist's Gabriel Cohen, shows every building to hold the title of world’s tallest since 1909, using the most recent data available from the Council on Vertical Urbanism (CVU).
Per CVU methodology, buildings must include floors, excluding structures such as Toronto’s CN Tower and the Stratosphere in Las Vegas. Heights are measured to the architectural top, including spires but excluding detachable antennae, flagpoles, or signs.
New York’s Skyscraper Boom
For most of the 20th century, the U.S. housed the world’s tallest building. New York in particular held the crown, with the Big Apple producing back-to-back skyscraper marvels from 1909 to 1972.
The Metropolitan Life Tower, constructed in New York’s Flatiron District, topped out at 700 feet in 1909. Within a few years, it would be surpassed by Tribeca’s Woolworth Building (792 feet), which itself lost the title by the late 1920s with the arrival of the Art Deco icon known as the Chrysler Building (1,046 feet).
The table below lists the world’s tallest buildings between 1909 and 2026.
The Chrysler Building, found in East Midtown, opened in 1930 as the world’s first supertall skyscraper. At the time, developers were racing to build the world’s tallest building, and the Chrysler Building famously beat rival 40 Wall Street by secretly assembling a 125-foot spire inside the tower before raising it into place after 40 Wall Street was completed.
The Chrysler Building’s victory was short-lived. In 1931, the Empire State Building (1,250 feet) opened and promptly became the world’s tallest building by a significant margin. However, Depression-era economic slowdowns caused abysmal tenancy rates in the new supertall skyscraper, which was popularly derided as the “Empty State Building” in the mid-1930s.
The Twin Towers and Chicago’s Resurgence
The Empire State Building maintained its position until the completion of the Twin Towers in New York’s Financial District in 1972. At that time, One World Trade Center, commonly known as the North Tower, took the title at over 1,368 feet, standing a few feet taller than its South Tower counterpart. The two towers would eventually be destroyed in the September 11 attacks of 2001.
Chicago, the birthplace of the modern skyscraper, reemerged as a dominant player in tall buildings with the 1974 opening of the Sears Tower (1,451 feet), named for the retailer headquartered there. The building held the title of world’s tallest for nearly a quarter-century, although it was renamed in the 2000s after British insurance broker Willis Group Holdings.
In the late 1990s, the Petronas Towers opened in the Malaysian capital of Kuala Lumpur at 1,483 feet, marking the first time in decades that the world’s tallest building was not located in the United States. Similar to the Chrysler Building nearly 70 years earlier, the Petronas Towers’ spires made the difference, much to Chicagoans’ dismay.
How Asia Took Over the Skyscraper Race
Since the Petronas Towers, the world’s tallest building has remained in Asia, albeit in different regions. TAIPEI 101, in the Taiwanese capital, held the title following its completion in 2004 at 1,667 feet. A few years later, Dubai’s Burj Khalifa opened at a staggering 2,717 feet tall.
The Burj Khalifa is over 60% taller than TAIPEI 101 and nearly four times taller than the Metropolitan Life Tower, which opened a century earlier. Its long reign as the world’s tallest building could come to an end in the coming years, however, as another Middle Eastern tower nears completion in nearby Saudi Arabia.
The Jeddah Tower, which will be the world’s first building to surpass one kilometer in height, is projected to open as early as 2028. Construction began in 2013 but has been plagued by delays and pauses, only passing the 100th floor as of April 2026. When completed, this megatall skyscraper is expected to stand at 3,300 feet, making it over 500 feet taller than the Burj Khalifa.
Where are the world’s tallest buildings concentrated today? Find out with The World’s Tallest Buildings in 2024 on Voronoi.
Tyler Durden
Mon, 05/25/2026 - 05:45
Four leading AI models discuss this article
"Repeated multi-year delays on megatall projects like Jeddah Tower indicate structural underestimation of costs and timelines that will pressure contractor margins."
The article frames a straightforward progression toward ever-taller buildings shifting to the Middle East, yet it underplays execution risk. Jeddah Tower has already slipped from a 2020 target to at best 2028, having only reached the 100th floor by April 2026. Historical parallels such as the Empire State Building's prolonged vacancy and the Petronas Towers' marginal height edge via spire suggest prestige projects often deliver poor near-term returns. Construction-sector margins in emerging markets remain vulnerable to funding pauses, regulatory shifts, and commodity volatility. Investors should price in multi-year slippage rather than assume 2028 completion.
Even with delays, the completed tower could still generate outsized tourism, branding, and FDI inflows that justify the overruns, as Dubai demonstrated after Burj Khalifa.
"The 21-year gap between consecutive world's-tallest-building records suggests megatall skyscrapers are becoming economically marginal, not that they signal healthy capital deployment."
This article is architectural history masquerading as forward-looking analysis. Yes, the Jeddah Tower will reclaim the title from Burj Khalifa—but that's a *lagging* indicator of economic vitality, not a leading one. The real signal: the gap between Burj Khalifa (2007) and Jeddah Tower (2028) is 21 years. The gap between Petronas (1998) and Burj Khalifa (2010) was 12 years. Slowing cadence suggests either capital constraints, regulatory friction, or declining ROI on megatall prestige projects. The article omits occupancy rates, cap rates, and whether these towers generate returns or just vanity. Jeddah's 13-year construction delay (2013–2026, still incomplete) screams execution risk and capital inefficiency.
Jeddah Tower's delays could reflect deliberate Saudi diversification away from oil-dependent real estate, not weakness—and the tower's eventual completion will still be a genuine engineering/economic achievement that attracts global capital and talent to the region.
"The pursuit of 'world's tallest' status is a classic contrarian indicator of late-cycle exuberance and impending commercial real estate oversupply."
The race for the world's tallest building is less a feat of architectural progress and more a lagging indicator of capital misallocation. Historically, these 'vanity projects' frequently coincide with market peaks and excessive leverage—the 'Skyscraper Index' theory. While the Jeddah Tower represents a massive engineering milestone, its decade-long delay and the economic stagnation of the mid-2020s suggest that the era of 'megatall' construction is shifting from a symbol of growth to a liability. For investors, these projects often signal peak supply in commercial real estate (CRE) and a desperate attempt to manufacture prestige in cooling markets. I am bearish on the long-term ROI of such assets given the current interest rate environment and the shift toward hybrid work reducing demand for premium office space.
These structures serve as vital 'anchor' assets that drive tourism and urban revitalization, potentially creating value through long-term land appreciation that traditional office metrics fail to capture.
"The megatall tower trend hinges on rare, long-duration financing and near-perfect occupancy; without strong anchor demand, incremental height adds little value and multiplies risk."
Historically, megatall towers have reflected branding and capital availability more than true demand. The article traces a long arc, but glosses two major risks for markets: financing costs and occupancy risk. Megatowers are ultra-capex bets with construction lags, inflation, and refi risk that can derail margins long after groundbreaking. Jeddah Tower's 2028 opening is far from guaranteed; even when complete, a glut of office space or shifting work patterns could depress rents and reduce cap rates. In short, the 'height race' is a lever for developers’ balance sheets, not a reliable growth signal for the broader economy or construction suppliers.
But if anchor tenants commit and financing is patient, prestige-driven demand could still support a viable project; the race isn’t necessarily dead.
"Sovereign funding changes the leverage math but not the opportunity-cost drag from multi-year megatall delays."
Gemini's Skyscraper Index link assumes private leverage cycles, yet Jeddah relies on sovereign capital that sidesteps refi triggers ChatGPT flagged. This still leaves exposure to oil-price shocks reallocating Vision 2030 funds mid-construction, extending the 13-year delay Claude noted. The real unpriced risk is crowding out higher-ROI diversification projects rather than direct default.
"Sovereign funding shields Jeddah from refi risk but amplifies crowding-out costs to Saudi diversification strategy."
Grok's sovereign-capital argument is sharp, but it inverts the crowding-out risk. Saudi Vision 2030 *requires* diversification wins—renewable energy, tech hubs, tourism. Jeddah Tower's 13-year slip and ballooning capex don't just delay; they signal capital is trapped in legacy prestige plays. That's not a refinancing problem; it's an opportunity-cost problem. If Jeddah eats 2028 capital that should fund higher-ROI sectors, the real damage is sectoral misallocation, not project default.
"Megatall towers function as sovereign 'loss leaders' that reduce the risk premium for broader national FDI, making traditional ROI metrics secondary to their role as branding infrastructure."
Claude, your focus on opportunity cost is correct, but you’re ignoring the 'anchor effect' of these projects. These towers aren't just office space; they are infrastructure for sovereign branding that lowers the risk premium for all other FDI in the Kingdom. While you see capital misallocation, I see a necessary 'loss leader' to establish the Saudi market as a global destination. The real risk isn't the tower's ROI, but the total failure of the surrounding urban ecosystem.
"Anchor megatalls can reduce risk premia only if Vision 2030's diversification succeeds; otherwise they crowd out higher-ROI investments and magnify sovereign debt and FX risk."
Gemini’s 'anchor asset' logic glosses over macro fragility: a flagship megatall can lower nearby investment risk only if the rest of Vision 2030 lands. Otherwise, it merely crowds out higher-ROI diversification and inflates sovereign leverage and fiscal risk if oil revenue volatility returns or construction overruns continue. The warning isn’t just ROI; it’s debt, debt service, and FX exposure baked into a prestige asset that may never pay for itself.
The panel is bearish on the long-term ROI of the Jeddah Tower, citing execution risk, capital inefficiency, and the risk of crowding out higher-ROI diversification projects. They also flag financing costs, occupancy risk, and the potential for these projects to signal market peaks and excessive leverage.
Establishing the Saudi market as a global destination through the 'anchor effect' of the Jeddah Tower
Crowding out higher-ROI diversification projects and capital being trapped in legacy prestige plays