The Real Deal New York

Construction spending to surpass 2016 peak

Developers are expected to drop $52.5B on building this year
By Rich Bockmann | January 01, 2018 01:00PM

Hudson Yards (credit: Getty)

With office towers rising on the Far West Side and logistics super-warehouses being built on Staten Island, 2018 marks the fifth year of the construction boom in the city. It’s also set to be a record year for building, with construction spending expected to hit $52.5 billion, surpassing the 2016 peak of $52.2 billion, according to the New York Building Congress.

The construction industry “continues to file on all cylinders” and the three-year outlook remains “white hot,” according to Building Congress CEO Carlo Scissura.

This year alone, 15 million square feet of office space is slated for completion in Manhattan, while another 2 million square feet is coming online in Brooklyn and Queens.

Here’s a look at some of the biggest commercial projects in the pipeline:

Hudson Yards

The Related Companies — in partnership with Oxford Properties Group and Mitsui Fudosan America — will break ground on 50 Hudson Yards after securing BlackRock as an anchor tenant last year. It’s also scheduled to complete 55 Hudson Yards  this year, and 30 Hudson Yards, the future home of Time Warner, in 2019.

Elsewhere in the area, Brookfield Property Partners is eyeing an early 2019 completion for 1 Manhattan West, and, in November, filed plans for a sister building. Meanwhile, Tishman Speyer is on the hunt for a construction loan for its Pfizer-anchored Spiral tower on 34th Street.

Roughly 1.7 million square feet of office space is set to be delivered to the Far West Side this year, according to Franklin Wallach, managing director of the research group at Colliers International. He said the 1.7 million square feet of office space coming to the Far West Side this year is, “certainly a significant addition in a submarket of only 7.7 million square feet.”

One Vanderbilt

Structural steel work can be seen rising above the ground at SL Green Realty’s $3.1 billion Midtown East office tower, which is scheduled for completion in mid-2020.

SL Green, which is developing the 1.7 million-square-foot building with Hines and the National Pension Service of Korea, secured TD Bank as an anchor tenant in 2014, and German lender DZ Bank and its affiliate DVB Bank signed leases in September.

At a conference last fall, SL Green CEO Marc Holliday hinted that more leasing action could be expected at the tower in early 2018. The Carlyle Group was reportedly in talks for four floors in the building, and law firm Greenberg Traurig has been touring it.

The JACX

Tishman Speyer’s $700 million complex at 28-01 Jackson Avenue will span 1.2 million square feet, making it the largest new office building in the pipeline outside Manhattan.

The two-tower development in the Queens Plaza section of Long Island City, dubbed the JACX, is being developed with the Doha-based investment firm Qatari Diar. It’s a part of a larger campus, which also includes three residential towers and 2 Gotham Center, an office building.

The partners have already pre-leased roughly 800,000 square feet of the Moed de Armas & Shannon-designed office project. WeWork signed on to take 258,0000 in 2016, and Bloomingdale’s signed on for another 550,000 square feet.

Dock 72

Rudin Management and Boston Properties’ Dock 72 will be the first new ground-up office building Brooklyn has seen in decades.

The 675,000-square-foot building at the Brooklyn Navy Yard is partially pre-leased to WeWork, which signed up for 220,000 square feet. Construction at the 17-story building overlooking the East River topped out in October, and when the project opens this summer, it will feature 35,000 square feet worth of amenities curated by WeWork, as well as a 13,000-square-foot food hall and a 15,000-square-foot health and wellness center.

Matrix Global Logistics Park

New Jersey-based Matrix Development Group is constructing a 3.3 million-square-foot distribution center in the Bloomfield neighborhood on Staten Island’s western shore. Amazon has already signed on to open a 975,000-square-foot fulfillment center at the site, and IKEA is in talks to lease another building of the same size.

Will Silverman at Hodges Ward Elliott, who last year brokered a $50 million sale of a four-acre e-commerce distribution site in Red Hook, Brooklyn, said one of the perceived advantages of having logistics sites in Staten Island and Brooklyn is that, “you don’t have to go across or around Manhattan to get to Brooklyn or Long Island.”