Sparked by a sharp increase in new residential projects, New York City construction starts reached $16.1 billion in 2012, a five percent increase from 2011, according to a New York Building Congress analysis of McGraw-Hill Construction Dodge construction data.
The data used in the report encompass all project starts between 2008 and 2012, including brand new construction as well as alterations and renovations to existing structures. The data reflect the total estimated value of each initiated project through the entire period of construction.
Residential construction starts reached $5.1 billion in value in 2012, a 54 percent increase from 2011, when construction starts reached $3.3 billion, and more than double the total ($2.3 billion) for 2010.
The residential sector, however, remains 14 percent down from 2008 when $5.9 billion in housing projects commenced.
It was another down year, however for the public works sector, which includes all government “non-building” construction starts, including roads, bridges, water systems and other infrastructure.
Construction starts in this area declined 12 percent, from $2.4 billion in 2011 to $2.1 billion in 2012. Starts in this sector have declined in each of the past four years and are down 62 percent from 2008, when public starts reached $5.7 billion.
The non-residential sector, which includes offices, hotels, schools, hospitals, transit stations, power plants and other institutional buildings, also fell. Construction starts in this sector declined 7 percent – from $9.6 billion in 2011 to $8.9 billion in 2012.
Through November, 80 percent of all 2012 residential project starts involved new ground-up construction — up from 70 percent in 2011.
The opposite was true for commercial buildings where 73 percent of all initiated projects entailed alterations and renovations to existing structures.
“The residential construction sector has gained considerable steam over the past year and a half,” said New York Building Congress president Richard T. Anderson.
“In five of the past six quarters, residential construction starts have topped $1 billion in value. This is a dramatic turnaround from the period between 2009 and the second quarter of 2010, when we witnessed a string of 10 consecutive quarters in which housing starts failed to hit the $1 billion mark.”
The top project starts of 2012 included A $400 million renovation of Macy’s Herald Square took the top spot this year followed by a $325 million project to construct entrances for the 96th Street station of the 2nd Avenue Subway, and a $250 million renovation of another retail icon — the Winter Garden in Lower Manhattan.
These were followed by a $242 million project related to construction of the Third Water Tunnel, a $235 million redevelopment of Goldwater North Memorial Hospital, and a $225 million park and public space project on Governors Island.
Of the top 15 projects by value, four were in the high-rise residential category, led by the $211 million Avalon West Chelsea development and the $200 million Baccarat Luxury Hotel and Condominium.
Anderson noted, “While office buildings were conspicuously absent from the top projects list, the sector is off to a very promising start to 2013.
“Work recently began on Related’s first Hudson Yards tower — a 1.7 million square foot office tower. In addition, Brookfield has broken ground on a rail platform for its Manhattan West project, which will include up to four million square feet of office space.ˮ
Silverstein Properties is also reportedly in discussions with several major tenants for space in 3 World Trade Center. If one or more leases are signed, it is possible that construction on the tower portion of that 2.5 million square foot building can begin in 2013.
