Insiders Debate Predictions That Construction Will Hit the Skids

NEW YORK CITY-J.A. Jones-GMO chairman Al McNeill recently released a statement declaring that the construction activity here would slow down. Since the release of this statement, industry insiders have been reacting, debating the issue between themselves. Many point to some considerable projects underway or planned for the future. Some argue that as compared with suburban markets elsewhere, Manhattan has a disadvantage in its limited developable space, but some say the future is in redeveloping space.

Currently there are a number of buildings under development around Manhattan. Cushman & Wakefield recently identified those it considers “major buildings under construction” in its Manhattan Market Highlights. C&W identified 383 Madison Ave. in the Grand Central submarket with a proposed completion some time next year creating 1.2 million sf of rentable office space; 5 Times Square in the West Side submarket to be finished in 2003 for 1.06 million sf of space; 1 Rockefeller Plaza West in the West Side submarket to be finished in 2002 creating 1.04 million sf of rentable office; 3 Times Square in the West Side submarket to be finished next year for 819,910 sf of rentable office; and 1731-1745 Broadway in the West Side submarket to be completed in 2003 creating 540,000 sf.

Insiders argue that there are plenty of projects in the works and that the economy may be up and down lately, but that development is a necessity in Manhattan where there is such a limited amount of office space for the continuing job growth. Most sources with whom GlobeSt.com spoke said that they don’t see that development has peaked, and that the financial lenders are so careful to not fund projects that are not pre-leased and show significant promise, that the pitfalls of the 1980s have been successfully circumvented in this economy. McNeill, however, says, “The heady days of activity over the last few years has begun to catch up to everyone in this industry.”