Thursday
April 24, 2014

The Year of the Skyscraper

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The Year of the Skyscraper

A recovery is taking hold in urban office development, sparking planners to dub this year “the return of the downtown high-rise.” Skyscraper projects have broken ground in numerous cities, including New York, Houston, Chicago, Phoenix, and San Francisco. 

Office construction starts rose 26 percent in November, continuing the growing momentum that started in the second half of 2013, according to a recent McGraw Hill report. A lot of that increase has been attributed to several large-scale office projects started in November, such as a $336 million Transbay Tower in San Francisco, a $265 million State Farm office complex in Tempe, Ariz., and $700 million Korean Air Hotel building in Los Angeles, the CoStar Group reports. The projects join other recent large-scale office projects across the country, such as Amazon’s $244 million project in Seattle; Houston’s BHB Billiton Tower; Samsung’s $300 million headquarters in San Jose; and Prudential Financial’s $444 million three-tower headquarters being built in Newark, N.J.

Office construction starts are still far off from pre-recession levels of the mid-2000s, but nonresidential development is posting a comeback and some of the strongest numbers in at least four years, the CoStar Group reports. The office, industrial, hotel and even retail sectors are seeing across-the-board increases, according to the CoStar Group. 

"The recent acceleration in economic activity sets the stage for a much better 2014, both for the broader economy and the nonresidential construction industry," says Anirban Basu, Associated Builders and Contractors chief economist. "We can expect nonresidential construction spending to expand during the first half of the year." 

Source: “New Era of Office Towers Will Continue to Rise in 2014,” CoStar Group (Dec. 31, 2013)

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