NYC Construction Starts Surged in First Half of 2015
Manhattan remains New York City’s dominant borough, as measured by the value of construction starts, but Brooklyn and Queens have significantly closed the gap in the residential sector this year, according to a New York Building Congress analysis of data from Dodge Data & Analytics.
Over a five-year period stretching from 2010 through 2014, Manhattan accounted for 60 percent of the value of all construction starts, followed by Queens with 15 percent and Brooklyn at 14 percent. Lagging further behind were the Bronx at 6 percent and Staten Island at 5 percent.
Manhattan accounted for 61 percent of the value of residential construction starts during the same five-year period, followed by Brooklyn at 19 percent and Queens at 12 percent. The Bronx contributed 6 percent while Staten Island came in at 3 percent.
In the non-residential sector, Manhattan accounted for 66 percent of construction starts from 2010 through 2014, followed by Queens with 14 percent, Brooklyn with 11 percent, the Bronx with 6 percent, and Staten Island with 2 percent.
Manhattan also led the five-borough pack in terms of government-backed public works projects, where spending traditionally is spread a bit more evenly. For the period between 2010 and 2014, Manhattan accounted for 37 percent of all starts, followed by Queens at 23 percent, Brooklyn at 17 percent, Staten Island at 15 percent, and the Bronx at 7 percent.
Strong Start to 2015
The first part of 2015 saw an impressive surge in initiated projects. New York City construction starts reached $22.2 billion in the first half of 2015, compared to $26.2 billion for all of 2014. Manhattan accounted for 53 percent of the construction starts by value, followed by Brooklyn at 24 percent and Queens at 16 percent.
The residential sector has served as the primary source of strength in 2015. A total of $10.5 billion in residential projects was commenced in the first half of this year, compared to $11.9 billion for all of 2014 and $6.9 billion during 2013.
During the period, the gap between Manhattan and the outer boroughs narrowed significantly in the residential sector. In the first half of 2015, Manhattan accounted for 37 percent of all residential starts by value, while Brooklyn surged, encompassing 36 percent of all residential starts, and Queens accounted for 23 percent.
In Brooklyn, nearly $3.8 billion worth of residential projects were initiated in the first half of 2015, compared to $2.4 billion for all of 2014. Similarly, residential starts in Queens reached $2.4 billion in the first six months of 2015, after reaching $1.2 billion during the full 12 months of 2014. Manhattan, meanwhile, held steady in the first half with $3.8 billion in residential starts after totaling $7.7 billion in 2014.
“The dominant construction story over the past few years has been the rise of ultra-luxury residential towers in Manhattan,” said New York Building Congress President Richard T. Anderson. “In 2015, however, we are witnessing what appears to be a leveling off in Manhattan while momentum builds in Brooklyn and Queens.”
Mr. Anderson added, “In fact, there is a better than even shot that this is the year that Brooklyn surpasses Manhattan at the top of the residential construction charts. Consider that in May and June of this year, building permits were issued for more than 13,000 residential units in Brooklyn compared to just under 8,000 in Manhattan. Assuming that a fair number of those permitted projects proceeded to the construction phase after July 1, it is likely that Brooklyn will pull ahead when all is said and done.”
Public and Non-Residential Sectors
Of the $2.1 billion in public works starts in the first half of 2015, 29 percent were initiated in Manhattan, followed closely by Brooklyn at 26 percent. The Bronx and Queens each accounted for 19 percent while Staten Island was home to 7 percent.
Manhattan continued to dominate the non-residential sector in the first half of 2015, accounting for 75 percent of all construction starts in the category, which includes office space, institutional development, government buildings, sports/entertainment venues, and hotels.
Manhattan was home to $7.2 billion in non-residential construction starts in the first half of this year, compared to $7.3 billion for all of 2014. Brooklyn accounted for $1.3 billion in non-residential starts, followed by Queens at $689 million, the Bronx with $356 million, and Staten Island at $155 million. Four of the five boroughs were on pace to easily exceed their 2014 non-residential values, while Queens was essentially on track to equal last year’s numbers.
Thanks in large part to new office construction in the burgeoning Midtown West district, Manhattan accounted for 86 percent of all commercial building projects initiated in the first half of the year – a period in which ground was broken for two Related towers (30 and 55 Hudson Yards) as well as Brookfield’s 1 Manhattan West.
Manhattan’s non-residential numbers were also buoyed by the start of construction on a cancer care and medical research complex being jointly developed by Memorial Sloan-Kettering and Hunter College on the Upper East Side.
“As New York City’s outer boroughs continue to gain in popularity, we should expect to see continued institutional investment. And the City recently has witnessed an increasing appetite for developing office spaces in some outer-borough neighborhoods,” noted Mr. Anderson. “That said, it’s hard to envision an end to Manhattan’s supremacy in the non-residential construction sector for the foreseeable future.”