5 Things We Learned From Anchin’s 2016 Construction And Development Forum
Held at the New York Academy of Sciences in 7 World Trade Center, this year's Anchin Construction & Development Forum saw 400 architects, contractors, designers and developers come together to discuss the best practices that developers are adopting and the key issues bottlenecking development, such as land acquisition and construction costs, which threaten to push developers out of NYC into other markets.
Bisnow partner and event host Anchin Block and Anchin not only helped assemble all of these industry experts–Silverstein Properties owner Larry Silverstein and Slate Property Group co-founder David Schwartz among them–but gave Bisnow a rundown of the biggest takeaways of the Forum. Check out what you need to know.
Modular Construction Is Here to Stay, But Has It Arrived?
Builders, developers and even insurance providers were fascinated by modular construction, and while industry experts agree that it will prevail in the future, current challenges make it difficult to predict when.
Modular construction's appeal is that it can remove certain potential obstacles from the construction process–including weather difficulties, project delays, the recruitment of location-specific talent, and the time spent waiting for inspections–saving time and money.
However, new challenges, including logistical issues regarding installation and transportation to New York City, where large deliveries face certain transit and parking restrictions, make many hesitant to embrace it.
Air Rights Could Offer Reprieve From Increasing Construction Costs
Ever-rising construction costs were a sobering topic at the Forum. While insurance costs have doubled as a result of changes to New York Labor Laws, the costs of land, labor and materials have increased as well. The fact that 421-a tax incentives expired doesn't help matters.
Air rights can increase the cost of doing business even more, but industry experts explained that loosening and altering air right and other zoning regulations could be a game changer, lessening construction costs and, subsequently, the barriers for the construction of more affordable housing.
Foreign Investment Is Slowing Down, But Not To A Halt
It's no secret that 2015 brought a surge of foreign investors–especially from China and the Middle East–to NYC and the rest of the US. However, panel experts said recent shifts are making foreign investments slower and more challenging to execute. But, the panel explained, this doesn't necessarily mean that foreign investors will stop being a key player in the US real estate market. Rather, these investors will be more selective and less transparent about their involvement. But when foreign economic situations allow, the desire to invest in NYC development projects remains strong.
The Demands, They Are A-Changing
As life in NYC is becoming more social and "shared," residents and office tenants are turning away from the separated, designated spaces of tradition, and industry experts are finding that they need to experiment more with open concept residential and shared working spaces, which allow companies to not only be more economic and create more employee work stations in fewer SF, but promote a collaborative environment as well.
Keynote speaker Larry Silverstein (pictured, left) described the expectations of the World Trade Center's TAMI tenants as “aconventional,” with desks with adjustable heights and incorporated couches. In addition, panelists discussed pre-fabricated interior design as a tool that could allow for technology to be seamlessly integrated into spaces.
If You Build It, They Will Come
NYC's continuing to evolve, with new neighborhoods–such as Hudson Yards and areas in Brooklyn–developing over time and opportunities for development popping up every day. Innovative developers like Larry–who built up Hell's Kitchen–will continue to see residents' needs evolve, and undesirable asset classes and neighborhoods may see new life in the future. All it takes is forward thinking and an innovative eye.