Dodge: High-rise construction ebbs, flows with economy
- Construction of high-rises — buildings taller than 10 stories — in the U.S. tends to rise and fall with the health of the overall economy, according to Dodge Data & Analytics. At the tail end of the Great Recession in 2009, fewer than 100 of these buildings broke ground, for example, compared with 500 high-rises breaking ground in both 2005 and 2006.
- Nonresidential high-rise project starts, when isolated from other building types, follow this same trend; however, even the most robust of economies, nonresidential starts numbered fewer than 200 per year since 2000. For buildings more than 20 stories in height that broke ground from 2013 through 2017, office and bank buildings, apartments and hotels dominated the market.
- High-rise construction is concentrated in major metros, and from 2013 through 2017, there were only 10 cities that saw the construction of 50 or more 10-story-plus buildings get underway. During that period, the New York City area broke ground on about 600 of high-rises, with the Miami area running a distant second with about 150. The Washington, D.C., metro area saw construction starts of about 120, followed by Chicago with just a little more than 100. Those metros in that period with between 50 and 100 high-rise starts were Seattle, Dallas, Boston, Houston, Los Angeles and San Francisco.
Contractors that operate in large metros are able to participate in the construction of tower projects and gain expertise that can lead them to jobs in other markets. For example, New York City-based AECOM Tishman Construction won the contract for SL Green's $3 billion One Vanderbilt Place mixed-use tower, which is under construction next to Grand Central Station in New York City. In fact, last year, The Real Deal reported that from 2012 to 2017, AECOM Tishman built 14 million square feet of ground-up construction, beating out Turner Construction by about 6 million square feet.
AECOM Tishman's expertise in high-rise construction is so strong that it was also selected to build the Paramount condominium tower that is part of the $2 billion Miami Worldcenter project, in a joint venture with Florida contractor Coastal Construction, and the $1 billion Spire, a 67-story residential high-rise in London.
AECOM acquired Tishman in 2010 and announced the company's rebranding as AECOM Tishman last year. At the same time, AECOM also rebranded its 2014 acquisition, Hunt Construction, as AECOM Hunt.
Turner Construction, despite being bested on total New York City square footage by AECOM Tishman, has also parlayed its expertise into involvement in domestic and international projects. Turner was the project manager for the Burj Khalifa in Dubai, the tallest building in the world, and the Makkah Royal Clock Tower in Mecca, Saudi Arabia. Stateside, Turner was the main contractor for the 1,102-foot tall Wilshire Grand Center in Los Angeles.
- Dodge Data & Analytics Looking Up at High-rise Construction
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