erty near Buffalo (NY) Niagara Medical Campus. On the West
Coast, KDC Real Estate Development and Investments has partnered with March HealthCare Development to build a complex on
the former March Air Force Base in Riverside County.
Though the “what” of construction is pretty straightforward,
the “where” is more varied. Louis Centorcelli, director of business
development and market analytics for Reed Construction Data in
Norcross, GA, produced statistics showing that the largest dollar
growth in construction has been in metropolitan areas such as
San Diego, Denver, Dallas, Boston and Worcester, MA. The data
Steve Van Amburgh, CEO with Dallas-based KDC Real Estate
Development & Investments, pointed out another reason Texas is
a popular spot to build: Taxes. Or rather, lack thereof. Several com-
panies from tax-intensive California are carefully examining
income-tax-free Texas and neighboring Oklahoma (which boasts
fairly low tax rates) for possible relocation and build-to-suit con-
struction. But current KDC projects in Texas (and for that matter
in other locales) are BTS rather than spec.
Only select projects in select regions are squeaking
through an increasingly uncertain economy
go on to analyze states with current projects in the planning
stages that are anticipated to break ground within the next year to
year-and-a-half. Leading the list are New York, California,
Maryland and Virginia.
Within this broad-brush stroke, additional hot spots emerge.
According to Ken Simonson, chief economist of Arlington,
VA-based construction industry association American General
Contractors of America, the main hot spot on his radar is, of all
places, North Dakota.
The reason? Bakken Shale, also known as North Dakota Shale,
one of the largest shale formations in the United States. The majority of the rock sits under the western part of North Dakota, as well
as parts of Montana and over the border into Canada. Pumps, compressors and storage tanks that are required to retrieve, store and
transport natural gas need buildings to house them, Simonson
notes, and North Dakota is reaping the benefits.
Perhaps more important, Simonson points out, Bakken Shale
activities are driving population growth, which results in more
housing. A recent National Public Radio report underscored
Simonson’s comments, noting the state’s energy boom has led to
a critical housing shortage as more energy workers arrive.
New housing trickles down into new retail development, perhaps followed by office. Additionally, auxiliary businesses requiring
industrial or flex construction tend to spring up around energy-extraction activities. In short, “there aren’t a lot of stores and
houses sitting around empty in North Dakota as they are in the rest
of the country,” Simonson comments.
North Dakota may be the “It” state when it comes to construction, but Texas has also been seeing its fair share. Texas is an energy
economy, certainly, says Simonson, but it also has had a large build-up of military facilities. That results in more personnel moving to
San Antonio, El Paso and Killeen—again, requiring housing, doctor’s offices, schools and neighborhood retail.
almost non-existent nationwide. Where it does occur, it’s because
of economic development agreements between private developers
and municipal and regional governments. MGHerring recently
struck such an agreement with the city of Terrell, TX for a massive
255-acre retail project dubbed Eighty Twenty. States such as Texas
have the economic tools to help private developers move forward.
“Without that kind of agreement,” Herring comments, “we wouldn’t
have been able to proceed with the project.” Other states that are
struggling, such as Florida and California, don’t have those economic development tools, he adds.
On the East Coast, Leslie E. Smith Jr., executive vice president of
development with Rockefeller Group Development Corp. in New
York City, says activity is bustling in the company’s backyard.
Rockefeller Group has joined forces with TDC Development and
Construction Corp. to develop the five-acre, $825-million Flushing
Commons mixed-use project in Queens. Other construction across
the city includes the 1.6-million-square-foot, mixed-use City Point in
Brooklyn, via a joint venture of Acadia Realty Trust and Washington
Square Partners; planned redevelopments of the former Corn
Exchange building and the old Taystee Cake Bakery, both in Harlem;
Danforth Development Partners’ $700-million East Harlem Media,
Entertainment and Cultural Center; and, of course, One World
Trade Center, which a JV of the Durst Organization and the Port
Authority of New York and New Jersey is putting up on the site of the
former World Trade Center complex in Lower Manhattan.
Smith also points out that high-quality tenants are the ones
engaged in BTS projects in places like New Jersey. In July 2011,
BASF and Rockefeller Group signed a long-term lease for a
325,000-square-foot office building in Florham Park that will serve
as BASF’s North American headquarters. Elsewhere in the state,
Rockefeller Group has the Central Crossing Business Park in
Bordentown, which it’s developing with IDI; and the 40-acre
Rockefeller Group Foreign Trade Zone in Jersey City.
