Smaller or less-known firms emerged as the dominant players in the hotel and mid-sized multifamily markets on The Real Deal‘s latest ranking of most active general contractors.
For mid-sized multifamily projects, with 25 to 199 units, a few affordable housing builders topped the list. Mega Contracting Group, an Astoria-based firm that does a lot of supportive and affordable housing work, was the No. 1 contractor, with 1.6 million square feet. Joy Construction, which also builds a lot of work in the sector, ranked second with 1.5 million. Monadnock ranked third with 1.4 million square feet, followed by T.G. Nickel & Associates with 1.2 million square feet and Lendlease with 1.1 million.
The hotel market — which for years has struggled with dropping revenues and oversupply — is finally showing some signs of promise. Average revenue declined at a slower pace last year, and demand appears to be on the rise. The number of new hotel rooms slated to open in 2018 is 7,802 — the highest number seen since at least 2000, according to hospitality research firm STR.
The number of new permits issued for such projects fell to 36 in 2017, down from 45 in 2016. And the number of permits issued for hotel renovations dropped steeply to six in 2017 from 12 the previous year.
Omnibuild led the pack of general contractors that scored the most hotel work in the past year, logging 1.7 million square feet of new product. Flintlock took second place with 1.4 million square feet, followed by Triborough Construction Service, Rinaldi Group and W&L Group Construction.
Anthony Rinaldi, head of the Secaucus, New Jersey-based Rinaldi Group — which raked in 977,079 square feet of new hotel work in 2017 — said he hasn’t seen a decrease in demand for the product.
“I keep hearing that the market is oversaturated with hotels,” he said. “I am reading about it, I am hearing about it, but I’m not seeing it.”
Instead, Rinaldi — who is also the New York City regional chair of the Associated Builders and Contractors, which represents nonunion construction shops — pointed to the shortage of skilled labor and rising costs as the biggest concerns for general contractors across the board.
In fact, construction costs in the city rose 3.29 percent from January 2017 to January 2018, according to the latest report by construction consultancy firm Rider Levett Bucknel.
“Guys are so busy that many of them aren’t bidding on new work,” Rinaldi said. “You wind up having fewer and limited volume of trades to go to, and that creates a difficulty, and it also creates a price-point battle.”