February 15, 2016

What do you think 2016 will hold for the NY’s construction sector?

“From my perspective I noticed two development/construction sectors that has been in the spot light. The first one, obviously is “affordable housing”. This topic has been the focal point of this current NYC administration for a few years. With the overbearing homeless population and a shortage of rental apartment, as measure by average medium income (AMI), NYC is in dire need for more housing stock. Lower income families and even average income families are being “pushed” out of the city due to increase rental cost. The current city administration recognizes this need and more importantly the NY State governor office recognizes this issue. Recently in the state of state address Governor Andrew Cuomo commitment for $20 billion to focus on affordable housing, shelter and etc. (NY Times January 13). I believe in 2016 and for the several years after, affordable housing development and construction will be an important focus.

The second and a more subtle trend is foreign investment into NYC properties, particularly Chinese based investment capital. For examples the purchase of the historical Waldorf Astoria hotel, the purchase of 80 South Street and 163 Front Street in the Financial District are all prime examples of Chinese corporate investment into the US and particularly NYC real estate. The reason was made clear after a brief discussion with my Hong Kong based colleague. In 2015 Chinese government made changes in their law to permit foreign investment. Coincidentally with the slowing trend in the Chinese economy, corporations are looking for a place to invest their cash, other than the stock market. I believe in 2016 there will be an increase in Chinese based owner/developer looking to acquire new properties and development in NYC.” Quote from James Lee, VP of Construction Management. Grosvenor Construction.

“Outlook for 2016 across the region is robust, now that clear guidance on resilient retrofit, planning and comprehensive strategies are in place three years after Super Storm Sandy, projects are moving forward at a fast pace. Given the federal grants recently announced, 179 million for New York City through HUD alone, 80×50 goals and funding for New York state that ties into climate smart community programs, NYSEDA programs and need for major infrastructure expansion and retrofit, the building industry can forecast far into the next decade with confidence. We need to meet our goals through smart growth strategies that will provide an energy efficient, resilient future while meeting the needs of a growing population.” Quote from Illya Azaroff, Director of Design. +LAB Architects

“The AEC community has the responsibility to provide to an owner and end user with a building product of the highest value they can conceive and construct. This requires processes that move beyond formal contractual relationships. There is a critical need for the project’s primary stakeholders ( Owner, Design Consultants and Constructors) to engage at the earliest time in the project management life-cycle in a truly collaborative and integrated process which aligns project team interests and requirements with individual interests. This requires a cultural shift, especially in the public sector where traditional project delivery methods reinforce individual silos of responsibility and limit opportunities for collaboration. Remains a significant challenge, especially in the New York State public sector marketplace where the adoption of alternative project delivery methods has been slow to evolve.”

“The emergence of a non- traditional labor force continues to upend the status quo of the long standing major GC’s/CM’s throughout the Greater NY area. Challenging opportunities lie ahead for all parties to find cost competitive solutions to provide an available and ample workforce of fairly compensated, highly skilled, well trained and safety oriented personnel to meet the industry’s needs.” Quote from James Kilbride, Vice President, Estimating and Procurement. The DeMatteis Organizations.