Chi-150-North-Riverside
Chicago's 150 N. Riverside will be the largest project delivered this year and has boosted employment and costs.
CHICAGO—C onstruction costs in the Chicago region increased 4.6% in 2015, one of the top rates in the nation, and non-residential construction market here can expect costs to rise 3.5% to 4% in 2016, according to the Mortenson Construction Index , a quarterly study published by Mortenson Construction Co. , a family-owned firm. Of the six major markets that Mortenson measures, only Denver and Seattle can expect comparable increases in 2016 following a 4.2% cost increase for Denver and 3.6% increase for Seattle last year. Overall Chicago construction costs were driven up by a rising demand for subcontractors. But the price for many key materials and components from gypsum boards and plumbing systems to elevators showed little to no increase in 2015, although the lead time for obtaining these materials has grown due to higher work volumes, Mortenson found.   “Prices for materials are driven more by national and global demand and supply while labor is tied more to the local market,” Dennis McGreal , chief estimator for Mortenson's Chicago office, tells GlobeSt.com. “Chicago subcontractors and craft workers have been getting steadily busier, tightening the supply of skilled construction workers.” The company calculates the index quarterly by pricing representative non-residential construction projects in various metropolitan areas, he adds. The representative model and inputs remain the same quarter to quarter. The index includes over 70 inputs comprising material, labor and equipment components included in most non-residential building projects. Mortenson also draws on local employment figures from the US Bureau of Labor Statistics. “After lagging compared to other cities in the early years after the 2008 recession, the Chicago construction market continues to recover,” McGreal adds. “We've had two years of steady growth. While the rates for new employment and construction starts moderated in the second half of 2015, they both will remain at healthy levels this year.” The Chicago region also has two of the ten largest office projects in the nation that developers plan to complete in 2016: the 53-story 150 N. Riverside office tower and the suburban Schaumburg headquarters for Zurich Insurance. Other major area construction projects include:
  • Northwestern University's $400 million biomedical research center on its Chicago campus
  • Advocate Good Shepherd Hospital's $247 million addition and renovation in suburban Barrington
  • University of Chicago's $150 million Jeanne Gang-designed residence hall
  • $600 million McCormick Center Entertainment District, including a new hotel, data center, and sports arena
NOT FOR REPRINT

© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.