Firm's Regional Revenue Continued to Climb in 2015
Residential construction is reaching new heights, but change is on the horizon for a market sector facing saturation and new scrutiny
Buoyed by a still-strong construction market in New York and New Jersey, the 50 firms ranked on ENR New York’s Top Contractor list this year were able to boost total revenue 7.6% to $21 billion based on 2015 figures. The top five firms posted a combined $9.7 billion this year, with Turner Construction Co. took the No. 1 spot for the second year in a row. AECOM, Structure Tone, Skanska USA and Lendlease again rounding out the top five.
Continued strength in residential construction, particularly in New York City, was a key catalyst. The city’s Dept. of Buildings issued 56,528 residential permits in 2015, a nearly 180% increase over the total in 2014, according to the New York Building Congress.
“Given the number of residential buildings already in the pipeline and the breath of demand throughout the five boroughs, it seems clear that the residential sector will continue to be a solid source of construction activity in the coming months,” Richard T. Anderson, Building Congress president, recently announced.
Among the current residential buildings under construction are two Lendlease projects—220 Central Park South and 250 South Street. The latter project, developed by Extell, is expected to be more than 50 stories high with an affordable housing component and retail space.
Developers of 220 Central Park South are hyping that the planned 950-ft, 70-story condo tower will have a four-floor, 23,000-sq-ft residence at the top that is priced at $250 million; if it sells, it would be the city’s highest priced apartment.
But recent media reports point to overbuilding in the high-end residential market, which is creating a market glut as changing global economics and stricter government rules on buyer disclosure cut into the size and number of transactions.
“Over the past few years we have seen a significant increase in condo development, [but] over the next few years we will see a decrease,” says Ralph Esposito, Lendlease head of East Coast operations He adds, however, there will be “a significant increase in public sector work such as the Javits Center.” Earlier this year, Gov. Andrew Cuomo announced a $1-billion expansion of the convention center on Manhattan’s West Side.
Office building work strengthened, accounting for $8 billion of the $11.8 billion spent on all commercial construction starts in 2015, according to the Building Congress. FreshDirect Bronx, a 670,000-sq-ft headquarters for the online grocery delivery firm under construction in the South Bronx, will combine corporate offices with manufacturing and production areas. The first two of three planned construction phases now are underway. The $170-million project helped propel its contractor, Schimenti Construction, to No. 21 on this year’s list, up from No. 27 the previous year.
“We are extremely proud to be part of this state-of-the-art facility that is going to benefit the metro New York area and beyond,” says Jeff Hogan, Schimenti project executive. The complex will add 1,000 full-time jobs to the area.
Work is also underway on an addition to the Niarchos Foundation-Rockefeller River campus, being built by Turner Construction. The three-story bridge-like structure over the FDR Drive on Manhattan’s East Side will add two acres to the campus. The work is being done in 19 sections, six of which are complete. The project is slated to finish in 2020.
Turner also is active in New Jersey, ranking fourth among top contractors there. It is renovating the former Hahne & Co. flagship department store in Newark into a mixed-use facility, which is being developed by L+M Development Partners. The structure will feature 160 mixed-income apartments and 160,000 sq ft of commercial space. A 110,000-sq-ft additional building is also under construction on the 510,000-sq-ft property as well as a 200-space underground parking garage.
“This project, while redeveloping a historic part of Newark, has been able to create many opportunities for local businesses and workers through significant community involvement and high M/WBE participation,” says Mark Romanski, vice president and general manager of Turner’s New Jersey office.
Turner is also doing preconstruction and construction management for The College of New Jersey Campus Town project in Ewing. Two buildings, each five stories and totaling 40,000 sq ft, will contain 21 apartment-style dorm rooms per structure. The project is an extension of the initial Campus Town development.