Revenue on the Rise for Regional Firms
New York’s 2017 list of the largest regional contractors rose to $24 billion based on 2016 billings, up 14.3% from the previous year. In all, 63 firms were included on the current list with revenue in New York and New Jersey of $25 billion. The $11 billion in revenue for the top five firms is a 10% increase over what they reported the year before. Firms appear to have benefited as construction spending in New York City reached $42.4 billion in 2016, the highest level in decades, according to the New York Building Congress. The figure is up about $10 billion since 2014, although only 3% higher than 2015’s $41.2 billion.
“The construction industry continued to fire on all cylinders in 2016, which has extremely positive short- and long-term implications for New York City and the region,” says Carlo A. Scissura, Building Congress president and CEO.
AECOM Tishman reached the top spot on the list this year, with $3.34 billion in regional revenue, rising from its No. 2 spot last year. Others in the top five include Turner Construction Co., Structure Tone, Skanska USA and Lendlease.
AECOM Tishman’s revenue total was buoyed by its participation in the $3.1-billion One Vanderbilt Avenue high-rise in midtown Manhattan. The first steel column for the 1.7-million-sq-ft megaproject was erected in June, says Jay Badame, president and COO.
Gilbane Building Co. rose to No. 7 on the list this year, reporting $1.05 billion in revenue, which nudged it up one spot. In March 2016, the firm began work on Brooklyn Navy Yard Dock 72, a 600,000-sq-ft commercial space on the Brooklyn waterfront. “The Gilbane team offered an alternative foundation design approach that resulted in cost savings while minimizing the challenges of building a steel structure on a pier,” says Bill Gilbane III, senior vice president.
The revenue total that contractors reported for New Jersey work reached $4.41 billion. Plaza Construction, which ranked eighth overall on the list and at No. 7 for top New Jersey contractors, began work on 99 Hudson Street in Jersey City in January 2016. When complete, the 1.4-million-sq-ft project will be the tallest building in New Jersey, reaching 900 ft. The mixed-use structure will include 780 residential units and about 19,000 sq ft of commercial space.
Transportation has been a strong regional market in the past year, with continuing major infrastructure upgrades pushed by Gov. Andrew Cuomo, including new and rehabbed bridges, the overhaul of LaGuardia Airport and track and station upgrades at Penn Station and on the New York City subway system. Transportation accounted for $3.15 billion in revenue in 2016 for top regional contractors. Skanska USA’s work in managing Penn Station renovations and the Moynihan train station upgrade (see related story, p. 32), helped catapult it to the top of the list of firms in reported transportation revenue.
The construction spending uptick has also boosted industry employment. The Building Congress recently announced that the 146,200 construction jobs created in 2016 was 5% above the previous year. David Pfeffer, chairman of the construction group at New York City-based law firm Tarter Krinsky & Drogin, says that “the pace of new construction, while adding to the employment numbers, has actually caused a shortage of experienced, skilled laborers.” But he also pointed out that “lenders have begun tightening the spigot for financing of new projects as vacancy rates in both the office and residential sector level off.”