Residential construction market rebounding.
Currently, there is approximately $1.5 to $2 billion worth of residential construction underway. In addition, $3 to $4 billion is now in the design phase, much of which will be under construction during 1995.
The last time New York City saw a housing boom was the early 1980s. Then, it seemed virtually every developer with a piece of property believed that if they put up a residential structure, it would sell. As we all are painfully aware, many of the projects that came on line in the mid-80s remained vacant and residential construction ground to a halt.
The economy was the wrecking ball, of course. During the late 80s, major corporations moved out of the city, taking jobs with them. Following the 1987 stock market crash, Wall Street firms cut back dramatically, greatly diminishing the demand for new units. For several years, the residential market remained so saturated that nobody would touch it.
With the city's economy bouncing back and the job market stabilized, we have clearly seen a resurgence of new residential projects, especially in Manhattan and now in Queens.
On the West Side
The Upper West Side is one area experiencing a residential renaissance after the boom and bust cycle of the 1980s. One prime example is the construction of Manhattan West, being developed by the Brodsky Organization. This $110 million project, located on West End Avenue between 61st and 64th Streets, comprises two towers totaling 1,000 units. The south building, which is 18 stories totaling 205,000 square feet with 198 apartments, is due to open the end of this year. The north building, which contains 802 apartments on 38 stories, will be completed and occupied in phases through mid-1995.
Construction was recently completed at Lincoln Square, a 47-story residential/commercial tower, between 67th and 68th Streets, and Broadway and Columbus Avenue. The $234 million project is a development of Millenium Partners. Millenium is building two more projects, to the south and west of Lincoln Square. One of these, Lincoln Triangle, will be available for occupancy by mid-1995. Construction on 1965 Broadway, a $60 million project, is expected to get underway next year.
Right behind that, the Trump Organization is pushing to transform the former Paramount Building on Columbus Circle into a luxury residential tower. Construction could start as early as the first quarter of 1995.
Work is also expected to start sometime next year on the first phase of Trump's Riverside South development, which could add 5,700 new apartments over the next decade. A Trump proposal to build 2,000 condominium units on David's Island off of New Rochelle would provide another big boost to the region's residential construction market.
Monumental Development in Queens
An official groundbreaking held on September 1st marked the emergence of a new era in residential development in Queens, with the start of construction for the Queens West Development at Hunter's Point. This $2.3 billion project, funded by HUD and the City of New York, will ultimately contain 6,300 apartments, 2.3 million square feet of commercial space and 20 acres of public park on the East River across from the United Nations. The first building, a 520-apartment cooperative, is slated for completion in the Spring of 1996.
Back in Manhattan, pre-construction work is underway for a $65 million mixed-use building in Battery Park City that will include 224,000 square feet of high quality residential apartments and an elementary school. Construction is scheduled to get underway in July of 1995 and to be completed in September of 1997.
Opportunities for New Contractors
This "new housing boom," for the most part, is still dominated by the major developers, tried-and-true design firms and construction management organizations that have long specialized in residential construction.
There are, however, increasing opportunities for contractors bidding for work. At LMB, we are hearing from a broader range of potential bidders, some of whom are relatively new to residential construction. They are filling a void that was created when some residential contractors closed their doors as the market dried up in the 1980s.
Certainly, we think the result will be sharper numbers and more competitive bidding, a trend that may spur developers to begin looking at additional projects in the months ahead.
After a very long slowdown, the sound of heavy construction equipment getting a move on new housing starts is beautiful music for the New York construction industry!
|Printer friendly Cite/link Email Feedback|
|Title Annotation:||Review and Forecast, Section V|
|Publication:||Real Estate Weekly|
|Date:||Jan 25, 1995|
|Previous Article:||Professionalism key to residential management.|
|Next Article:||City townhouses made a comeback in 1994.|