Currently there are a number of buildings under developmentaround Manhattan. Cushman & Wakefield recently identified thoseit considers "major buildings under construction" in its ManhattanMarket Highlights. C&W identified 383 Madison Ave. in the GrandCentral submarket with a proposed completion some time next yearcreating 1.2 million sf of rentable office space; 5 Times Square inthe West Side submarket to be finished in 2003 for 1.06 million sfof space; 1 Rockefeller Plaza West in the West Side submarket to befinished in 2002 creating 1.04 million sf of rentable office; 3Times Square in the West Side submarket to be finished next yearfor 819,910 sf of rentable office; and 1731-1745 Broadway in theWest Side submarket to be completed in 2003 creating 540,000sf.

Insiders argue that there are plenty of projects in the worksand that the economy may be up and down lately, but thatdevelopment is a necessity in Manhattan where there is such alimited amount of office space for the continuing job growth. Mostsources with whom spoke said that they don't see thatdevelopment has peaked, and that the financial lenders are socareful to not fund projects that are not pre-leased and showsignificant promise, that the pitfalls of the 1980s have beensuccessfully circumvented in this economy. McNeill, however, says,"The heady days of activity over the last few years has begun tocatch up to everyone in this industry."

He also says that forecasts showing that development willincrease only 1% next year, a continuation of a three-yearslowdown, reflect several factors, including overtime, burnout, ashortage of 250,000 construction workers to fulfill current plansand raising prices at construction firms for services. His reportstates, "With wages on the rise, projects that might have gottendone a year or so ago will have trouble being brought tofruition--simply because they do not pencil out. Manhattan's tightcommercial real estate market will compound this situation--forcingowners and tenants to consider other options."

Continue Reading for Free

Register and gain access to:

  • Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.