Carlo A. Scissura, president and CEO of the New York Building Congress
NEW YORK CITY—While the mega-projects grab the biggest headlines and most attention, middle-market construction projects are becoming a significant contributor to the city's economy.
In a report released today that reviewed construction starts data in New York City from 2013-2017, the New York Building Congress states that spending on mid-market projects rose 155% from 2013 to 2017, which was a greater increase than both the high- and low-market construction sectors enjoyed during that five-year span. In 2013, spending on mid-market projects totaled $1.1 billion and last year the sector topped $2.8 billion in value.
The report also notes that most hotels built between 2013 and 2017 were mid-market projects. By borough, Staten Island and the Bronx had the highest percentage of mid-market projects compared to high- and low-market construction. The report defined mid-market projects as those in the $10-million to $100-million range for office and hotel projects; $1 million to $25 million for retail projects and $25 million to $50 million for residential construction projects.
“New York's greatest strength has always been its diversity—from the people that live here, to the careers they pursue, to the buildings and neighborhoods they reside in,” said New York Building Congress President & CEO Carlo A. Scissura. “As an industry, the construction projects we're building are equally diverse. High-rise office and residential towers may garner most of the headlines, but our members are building at all scales throughout the five boroughs and more and more is being done at the smaller and mid-size levels. This variety of building helps ensure our residents and businesses continue thrive and our industry remains strong.”
While mid-market projects are increasing, that does not minimize the tremendous impact and market share large-scale projects maintain in New York City.
“The dominance of large-scale projects on New York's construction industry cannot be overstated, the Building Congress report states. “These include transformative projects that reshape our skyline like Hudson Yards, the World Trade Center and residential high-rises in Long Island City, Downtown Brooklyn and Manhattan. They accounted for 76% of new square footage and for 88% of new construction spending through the five boroughs.”
Mid-market hotel construction accounted for 60% of the value of all hotels built between 2013 and 2017 in New York City. Of the $4.5 billion in total new hotel construction, mid-market projects accounted for $2.7 billion. When comparing the size of construction projects, mid-market hotels accounted for 58% of the square footage of new hotel space built over the same period. Of the 15 million square feet of new hotel projects, mid-market hotels accounted for 9 million square feet. There were 117 hotels built between 2013 and 2017, and 78 were mid-market hotels.
Mid-market hotels accounted for the majority of hotel projects in almost every borough. Approximately 65%of the hotels in Brooklyn and Queens were mid-market. In Manhattan, 81% of hotels built between 2013 and 2017 were mid-market projects, the report states.
Office construction was dominated—in terms of the value of the project and newly built square footage—by projects valued at more than $100 million. Of the $12.7 billion in new office construction between 2013 and 2017, projects over $100 million accounted for approximately 88% of the total value ($11.15 billion). Projects over $100 million in value accounted for 76% (17.36 million gross square feet) of the total 22.7 million gross square feet of new office construction. Mid-market office projects had a 15% market share of new square footage built and a 10% share of the gross value of all new commercial construction.
During the five-year period, there were 140,181 residential units built across New York City. A total of 45% of those units were built in projects greater than $100 million, 40% were built in projects less than $10 million, and 14% were constructed in mid-market projects. From 2013-2017, 164 million gross square feet was either completed or permitted in New York City.
Mid-market retail projects outpaced high and low-market projects in the city during that time. Of the 402 retail projects built between 2013 and 2017, 210 (52%) were built in the mid-market range. When combined with low-market projects, they accounted for 95% of all new retail construction. While high-value projects only accounted for 5% of all new retail projects, this sector represented 63% of the total retail construction value in that five-year span.
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John Jordan
John Jordan is a veteran journalist with 36 years of print and digital media experience.
