Value of NYC Construction Starts Rises 44 Percent in 2018: Dodge
New York City construction activity was up nearly 50 percent in the first half of 2018 even as it slid slightly nationwide, according to data released by Dodge Data & Analytics.
After a slowdown last year, the value of construction starts in the New York metropolitan area shot up 44 percent to $16.14 billion, from $11.19 billion in the first half of 2017. New York City’s big construction boom was driven largely by an 83 percent jump in commercial development, Dodge numbers show.
The dollar volume of new office construction starts in the New York City area increased 114 percent in the first six months of this year. But those numbers were still down 25 percent from 2015, when city builders began construction on 76 million square feet of commercial and residential projects, hitting the highest level of new construction in nearly half a century.
“New York City had a booming construction market in 2015, and then we saw a pullback take place,” Robert Murray, the chief economist at Dodge, told Commercial Observer. “So even though we are looking at improvement for the first six months of the year for the New York City market, you can attribute a lot of that to the impact of several very large projects in the first six months of the year. It will still be an up year for construction and multifamily starts in the New York City area. But it’s unlikely that it will reach the record high amount it achieved in 2015.”
Developers broke ground on several big office developments during the first half of 2018, including Tishman Speyer’s $1.8 billion supertall, The Spiral, in Hudson Yards, the $480 million office addition to Cove Property Group’s adjacent Hudson Commons building, and the $300 million One Willoughby Square commercial tower by JEMB Realty in Downtown Brooklyn.
Hotel construction is also having a banner year in and around the five boroughs, growing 246 percent year-over-year in the first half of the year. Three major hospitality projects under construction near Times Square helped contribute: Tribeach Holdings’ $300 million Riu Hotel, the $180 million Margaritaville Resort Times Square and the $125 million Hard Rock Hotel.
Murray attributed the commercial development numbers to a strong economic climate and the rollback of Dodd–Frank Wall Street Reform and Consumer Protection Act regulations, which have prompted banks to loosen their lending standards for residential and commercial projects.
The value of multifamily construction projects that broke ground also rose 22 percent from the first half of 2017. Dodge found that 15 projects valued at more than $100 million apiece kicked off construction in the first half of 2018, including the $700 million City View Tower, the $550 million Queens Plaza Park apartments (both in Long Island City, Queens), and the $232 million Journal Squared 2 tower in Jersey City, N.J.