Insight

Construction News: 5 Boom Cities of 2020

Architectural rendering of Hudson Yards in Midtown Manhattan.
Hudson Yards in Midtown Manhattan | CREDIT: hudsonyardsnewyork.com

According to Dodge Data & Analytics, 10 consecutive years of relentlessly positive construction news is over. “The recovery that began in 2010 is coming to an end,” said Richard Branch, Chief Economist at Dodge. “After increasing 3% in 2018, construction starts dipped an estimated 1% in 2019 and will fall 4% in 2020.”

Now, hold on a second. Wipe those tears. Construction starts might be declining, but growth isn’t down for the count just yet. “While starts will decline,” Branch noted, “the level of activity will remain close to recent highs.”

Also, the U.S. Chamber of Commerce reported that more than 58% of contractors are “confident that the next 12 months will bring sufficient business opportunities.” While not overwhelming praise, that’s the largest percentage of optimism about the industry’s financial future in four quarters.

The upbeat notes continue at constructionequipment.com, where their latest survey predicts a “very good 2020” in home building and nonresidential construction alike.

With infrastructure investment leading the way, is the 2020 construction news a mixed bag, or a bonanza of multi-billion dollar projects? Here are our picks.

NEW YORK CITY

CONSTRUCTION NEWS

  • Spending on infrastructure mega-projects is only one of the reasons we love New York City. The 2020 estimated total is nearly $66 billion.
  • Permits are up and unemployment claims are down year over year. But look for a slight retreat in total construction employment this year.
  • Vacancy rates were a bit soft at the end of 2019 due to an increase in inventory.

Average wage: $54,940

Architectural rendering of JSK International Airport.
New York will spend $13 billion updating JFK | CREDIT: anewjfk.com

NOTEWORTHY PROJECTS

  • MTA Capital Plan ($50B) – What to do when you have frequent delays, too few trains and a neglected infrastructure? You improve service, add cars and track, improve signaling, and make more than 70 aging stations ADA accessible.
  • Western Yard ($25B) – Hudson Yards Phase 2 includes more than 6 million square feet of office, residential, retail and school construction bordered by The High Line elevated park. Developers are aiming for completion in 2024.
  • JFK Modernization ($13B) – Announced in 2018, the revitalization project will add two new international terminal complexes, as well as improved access by road and transit.

DALLAS-FORT WORTH

CONSTRUCTION NEWS

Average wage: $33,120

Architectural rendering of Globe Life Field.
Globe Life Field features a retractable roof. | CREDIT: hksinc.com

NOTEWORTHY PROJECTS

  1. Globe Life Field and Texas Live! Entertainment District ($5.35B) – With work mostly complete, the Rangers are moving from the Park to the Field for the 2020 season. A retractable roof will shield fans from rain and high temperatures.
  2. DFW Expansion ($3.5B) – DFW International Airport and American Airlines are adding a sixth Terminal F and enhancements to Terminal C with up to 24 additional gates. The expansion is part of an ongoing AA retention strategy at DFW.
  3. Sapphire Bay (aka Bayside – $1B) – Groundbreaking has happened, so we’ll see if the third time’s the charm for this mixed-use development project featuring a man-made lake, a 117-acre beach-themed resort, marina, conference center and beach club. Wait, a resort and a beach club?

WASHINGTON, D.C.

CONSTRUCTION NEWS

Average wage: $36,110

Architectural rendering of National Landing.
National Landing | CREDIT: jbgsmith.com

NOTEWORTHY PROJECTS

  • D.C. Metro Silver Line Expansion ($6.8B) – Forecast for completion summer of 2020, this extension will bring additional service to Dulles International Airport and Loudoun County, Virginia. Station and track construction is complete, but questions regarding train control and testing have hampered efforts to wrap it up.
  • Amazon Headquarters at National Landing ($4B) – Between Arlington and Alexandria and alongside Reagan National, the site will feature two 22-story, 2.1 million square foot towers to house thousands of the ecommerce giant’s new workers.
  • Virginia Tech Innovation Campus ($1B) – And where will Amazon find these thousands of new workers? They’ll grow their own at Virginia Tech’s new 1-million square foot campus in Alexandria. The school expects to host 500 master’s students within five years, with the goal of 750 master’s candidates, doctoral students and postdoctoral fellows.

LOS ANGELES

CONSTRUCTION NEWS

Average wage: $46,680

Architectural rendering of SoFi Stadium.
SoFi Stadium will house both the LA Chargers and the LA Rams | CREDIT: chargers.com

NOTEWORTHY PROJECTS

  • LAX Modernization ($14B) – The new “People Mover” automated train system promises efficiency improvements for passengers. A $1.6B Midfield Satellite Concourse will unveil 12 new gates. The project will create more than 120,000 annual construction jobs.
  • SoFi Stadium & Entertainment District ($5B) – Featured projects include a 70,000 square-foot stadium seating 100,000; 780,000 square feet of office space; 890,000 square feet of retail, hundreds of new hotel rooms; 2,500 residences and a 25-acre recreation space.
  • Games of the XXXIV Olympiad – $6.9B – Plans for the 2028 Olympic Games include no new purpose-built structures. Instead organizers will make use of existing venues like SoFi Stadium and California’s numerous student housing facilities, among others. The real lynch pins of a successful effort rest on modernization of both LAX and the Los Angeles Metro transit system.

MIAMI

CONSTRUCTION NEWS

Average wage: $31,930

Architectural rendering of InterMiami CF Stadium.
InterMiami CF Stadium | CREDIT: intermiamicf.com

NOTEWORTHY PROJECTS

  • InterMiami CF MLS Stadium ($60M) – Owner David Beckham fast-tracked the project for the March opening of the 2020 MLS season. The stadium features 18,000 seats and a 50,000 square-foot training center.
  • American Dream ($3-4B) – Malls aren’t dead, they’ve just become theme parks. And what do you need to support the likes of indoor lakes and a ski slope? For starters, a $15M sewer pipe. Also competing for shoppers’ attention are an ice rink, aquarium, submarine lake and roller-skate emporium. Somewhere in all that is an unspecified amount of retail space.
  • Miami WorldCenter ($2B) – The 25-acre development opened the 43-story Caoba apartment tower in 2019. What follows will include retail and residential construction, an 1,800-room hotel, and 600k square-foot convention center.

Riding the wave into 2020

Our picks for the 2020 Construction Boom Cities list rely heavily on infrastructure spending and strong real estate markets for their continued prosperity. Their project pipelines are robust, but slowing growth rates and weakening demand in some markets suggest a flattening of the accelerated results of the last ten years.

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