Development and Construction News

In The Pipeline: CoStar Development and Construction News for April 25 – May 1 

In this week’s In The Pipeline, the Architecture Billings Index, a leading indicator of future nonresidential construction spending, rises for a second straight month in March. In lower Manhattan, four developers are said to be interested in a minority stake in the 104-story glass tower formerly known as Freedom Towerat Ground Zero; Capital City Partners plans to build a 15-story office tower in Austin, TX; and a joint venture has closed the purchase of the former Ireland’s Inn beachfront in Fort Lauderdale, FL.

In multifamily news, the first units of a 315-unit apartment project near Salt Lake City are set to deliver this summer; the U.S. General Services Administration will be the first to take space at the Parc 114 Near Dallas Fort Worth Airport, and in retail, a shopping center will rise in the Hunting Park West section of Philadelphia at the site of the former headquarters of Tasty Baking Co.

Rise in Architect Billings Could Show Turn in Development Market

In evidence that the demand for architects and other design services by developers may be starting to recover, a leading indicator of future nonresidential construction spending rose for a second straight month in March. However, the Architecture Billings Index shows that demand for architect services remains in contraction overall, despite the 1.3-point rise in March to 46.1.After dropping for two months, an index of inquiries for new projects released along with the billings index by the American Institute of Architects (AIA) rose six points in March to 58.5. A number above 50 indicates expansion in demand, while an index below 50 point shows declining demand. The billings index reflects a lag time of about nine to 12 months between architecture billings and actual construction spending. The March billings index, up from 44.8 in February, is the highest since August 2008.AIA Chief Economist Kermit Baker called the March reading “an encouraging sign that we could be moving closer to a recovery phase,” though he cautioned that conditions are volatile and signals remain mixed in different markets around the nation.”Firms are still reporting an unusual amount of variation in the level of demand for design services, from improving to poor to virtually non-existent,” Baker said. “This increasing volatility is often a sign that overall business conditions may begin to change in the coming months.”The index edged over 50 to 50.5 in the Midwest region. However, the index remained in negative territory in the Northeast (47.0), West (46.0) and South (44.4). 

OFFICE DEVELOPMENT

With competing visions and opinions about its proposed scale and design, the 104-story glass tower formerly known as Freedom Tower in Manhattan hasn’t always enjoyed the best press.

However, now that the tower is rapidly going vertical at Ground Zero, several major developers say they are interested in buying a minority stake in the development and taking over leasing of the $3.1 billion project. Four developers submitted offers last week to the Port Authority of New York and New Jersey for 1 World Trade Center, according to the New York Times.In addition to Related Companies, those interested in the $100 million stake include the Durst Organization, Hines and Mort Zuckerman, CEO of Boston Properties, the newspaper reported.The 1,776-foot, obelisk-shaped tower located in lower Manhattan at the northwest corner of the 16-acre World Trade Center site bounded by Vesey, West, Washington and Fulton streets is scheduled for completion in 2013, with topping out estimated at late next year.The tower is expected to include 2.6 million square feet of office space, an observation deck, a world-class restaurant, parking, and broadcast and antenna facilities. The project includes below-ground tenant parking and storage, shopping and access to subway trains.Capital City Partners LLC plans to build Park Plaza, a 15-story, 189,000-square-foot, predominately Class A office building at the northeast corner of West Cesar Chavez Street and Lamar Boulevard in Austin’s central business district. Ground break is planned for as early as this October with an anticipated delivery date of April 2012.

The project would feature approximately 10,000 square feet of retail on the ground floor and 179,000 square feet of office. It will be built along Lady Bird Lake on the Sandy Beach tract. The site is described as development ready which means construction could commence immediately. It would be the first major office project built in the CBD since Frost Bank Tower broke ground nine years ago.  

 Read More Articles from Costar’s Development News Weekly here.

Source: CoStar

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