Building boom creates opportunity for construction industry.

Following a long period of absence, construction cranes are once again popping up on the Manhattan skyline. Fueled by the robust national and local economics, low interest rates and recordbreaking highs on Wall Street, all sectors of the real estate market are now thriving.

In turn, this is causing a boom in New York's construction industry. Office towers, hotels and residential buildings are breaking ground throughout the City.

One of the most active sectors fueling the construction boom in New York is the hotel industry. Sparked by near-record occupancy levels, hotel developers are proceeding with expansion and renovation plans throughout Manhattan. Currently there are three new hotel projects in various stages of development. York Hunter is serving as construction manager for two of these projects: The Manhattan Courtyard Marriott at 114 West 40th Street, and the Gold Street Holiday Inn at 15 Gold Street.

These two projects, situated in neighborhoods that were previously overlooked by hotel developers, signal both the strength of their respective submarkets and the demand for hotel rooms in the City.

Another area of construction that holds potential for substantial growth is the interiors business. This is a recession-resistant niche, because tenants need to have spaces built for them in good times and bad. In fact, 7 percent of space turns over even when the economy is depressed. The interiors business provides a hedge against a market downturn because tenants must adjust their space to accommodate both expansion and downsizing.

To capitalize on the opportunities in the interiors business, York Hunter recently launched a separate interiors unit for which we hired 15 people. We've done work on the interior side of the business for years as an additional service for existing clients, but demand for interior work has grown so much that we felt the timing was right to form an independent business group devoted exclusively to interior construction. We aim to grow our interiors volume from $12 million in 1997 to $55 million this year and $100 million next year.

A major key to success in today's construction market is the ability to provide clients with value-added services that meet their specific needs. For example, we will often secure the financing on behalf of a client in order to build the project, sparing them the hassle of doing it themselves. Another example is the Manhattan Courtyard Marriott, the 32-story hotel we are currently building in the Fashion District. We are not only guaranteeing the completion date of construction for the hotel, but we are guaranteeing the hotel's opening date as a special service to the client.

The significant activity in the City's real estate market has certainly created a lot of opportunity and excitement in the local construction industry, but at the same time, the industry faces a very serious image problem which must be addressed. The industry as a whole has suffered from the negative perceptions brought on as a result of the ongoing investigations and pleas of a select group of contractors. To prevent further abuses within the industry, Mayor Giuliani has proposed a licensing system which has been met with much controversy from both outside and inside of the industry.

Most of the construction firms in New York City are honest and reputable, and should welcome Mayor Rudolph Giuliani's proposal to set licensing requirements for the industry. Rather than take a confrontational posture with City Hall and point to all the problems with the licensing proposal, we should work with City Hall and find ways to make the system work. This way, the few dishonest firms will be weeded out, and we can get on with the job we have been doing so well - building and re-building New York City.