Residential Leads the Way by Fueling Large Projects
Propelled by a wave of major residential development projects in New York City and Jersey City, N.J., the construction value of the region's top 30 projects to break ground last year totaled just over $11 billion. While that's down from $12.7 billion in 2013, it marks the second year in a row that the aggregate total construction value of the region's top projects has broken the $10-billion mark since the recession began in late 2007.
The boom in housing demand, particularly in the upscale market, is a key driver. In New York City alone, housing starts rose in value for the fourth consecutive year. They reached $11.9 billion in 2014, a 73% increase from $6.9 billion in 2013, according to a New York Building Congress analysis of construction data from Dodge Data & Analytics published in mid-February. The surge in residential construction is largely a product of ongoing demand for luxury apartments, says the Building Congress. In fact, the city ranked as the top metropolitan area in terms of 2014 dollar amount of multifamily starts.
New apartment projects accounted for 10 of the top 30 projects in the region. These include the No. 1 ranked $1-billion Flushing Commons residential and retail development in Flushing, Queens, that is being built by Tishman Construction, a unit of AECOM.
Close behind at No. 2 is Extell Development Co.'s $957-million Nordstrom Tower in Manhattan, also known as West 57th Street, on which Lend Lease is leading construction. Two listed residential projects are taking shape in New Jersey: the $291-million Harborside Urban Ready Living building (No. 15 on the list) and the $200-million 88 Kushner-KABR building (No. 18). Both projects are being built by Jersey City-based AJD Construction Co.
Boom in Buffalo
The Building Congress analysis also shows that construction starts in the nonresidential sector climbed to $10.5 billion in 2014, up 26% from $8.3 billion in 2013. In the health care sector, the $800-million David H. Koch Ambulatory Care Center at Manhattan's New York Presbyterian Hospital and the $800-million Helen L. and Martin S. Kimmel Pavilion at New York University are the largest on the list (both ranked No. 4).
SolarCity's $900-million Solar Panel Manufacturing Center in Buffalo (No. 3) is the lone listed project in manufacturing. It reflects the current building boom in that city, one of three major projects to have broken ground in 2014. Others include the State University Construction Fund's $275-million University at Buffalo School of Medicine and Biomedical Sciences project (No. 16) and Kaleida Health's $270-million John R. Oishei Children's Hospital (No. 18).
According to the Building Congress, construction starts in the public sector reached $3.7 billion in 2014, down 21%. Public projects surged in 2013 thanks to the launch of several major bridge projects.
Public sector work is still highly visible on this year's list, with the start of the $555-million Kosciuszko/Newtown Creek bridge rehabilitation (No. 7); the $292-million reconstruction and rehab of Runway 4L-22R at JFK International Airport (No. 14); the $148-million LaGuardia Airport capital infrastructure program (No. 25); and the $126-million fourth phase of the Pulaski Skyway northbound deck replacement (No. 28). Other public sector starts are part of ongoing work under the MTA Capital Construction's East Side Access project, including the $333-million Systems Package 1-Facilities Systems (No. 11).
Commercial buildings accounted for $5 billion in new projects in 2014, with about $4.8 billion in institutional sector starts, according to the Building Congress. Electric utilities and manufacturing projects made up the remainder.
"As encouraging as 2014 was, 2015 is already shaping up to be a blockbuster year in the nonresidential sector," says Richard T. Anderson, Building Congress president. He notes the start of 55 Hudson Yards and points to 33 Hudson Yards, set to begin later this year. Hudson Yards joint owners The Related Cos. and Oxford Properties Group also broke ground on the $700-million Eastern Yard Platform (No. 6). These will add more than 6.5 million sq ft of new office space, he says.