Though New York construction down, RCD indicates commercial construction stable
New York City's building boom is coming to a close, and commercial building is declining, reports the New York Building Congress. But Reed Construction Data reports that commercial construction is stable.
Reed Construction Data tracks construction projects across both the United States and Canada. The Oct. 15 webcast will take an in-depth look at the U.S. construction market. Commercial Register today for the webcast.
The New York Times reports that New York City’s long-running building boom will peak this year, before new office and residential projects peter out in the coming years and the number of construction jobs falls by almost 30,000 by 2010. A report released Tuesday by the New York Building Congress offered a glimpse of the future of commercial construction.
The building congress, a trade group for construction and real estate companies, estimates that construction spending on new housing, office towers, stadiums, subway tunnels, and schools will decline slightly in 2009 before falling to $26.2 billion in 2010, from $33.8 billion this year. But even that forecast may be a bit optimistic.
The report noted that construction had already begun on “the majority of the 15 office towers factored into the 2009 and 2010 estimates.” But at least one-third of those projects are already in doubt, given the flagging economy, turmoil on Wall Street and the virtual disappearance of construction financing for new projects.
Few if any real estate and construction executives believe that JPMorgan Chase will build a new tower downtown, at Greenwich and Cedar Streets, as it announced last year that it would, now that it has bought Bear Stearns and Bear’s Midtown headquarters.
Vornado Realty Trust, one of the city’s biggest commercial landlords, suspended its plan to build a 23-story, $435 million headquarters for Major League Baseball’s cable network, after it failed to secure additional tenants and financing. Vornado’s effort to build a 1.3 million-sq-ft office tower over the Port Authority Bus Terminal on 42nd Street is also “dormant,” a company executive conceded.
But a more gloomy situation involves a prolonged downturn, with private projects coming to a standstill while government slashes funding for mass transit projects, new schools, and infrastructure. Currently, capital spending by city, state, and federal governments accounts for about half of all construction activity in the city.
Vacant space in the city’s office towers is no longer hard to find. In Midtown alone, more than 20.9 million sq ft of space is available, according to the latest report by Newmark Knight Frank, a real estate broker. The availability rate — the amount of space vacant or available — rose to 10.2% in September, up from 8.2% a year ago.