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NYBC: Value of Permits for Building Renovations Rises

Carlo Scissura Scissura: “Interior construction work is the unsung hero of the current building boom.”

NEW YORK CITY—The NYC Dept. of Buildings issued 5,641 permits, with a combined value of $9.3 billion, for alterations and renovations to existing buildings in 2016, according to a new analysis of construction data conducted by the New York Building Congress.

This marks the third consecutive year in which the value of building permits for construction work on existing buildings has increased. In 2015, the DOB issued 4,927 permits with a total combined value of $9.1 billion.

Building owners were granted 4,964 permits for $8.7 billion in A&R work in 2014, and 3,991 permits for $5.9 billion in 2013. For the three-year period from 2014 through 2016, the value of A&R permits averaged $9.0 billion per year, up from an average of $5.5 billion annually from 2011 through 2013.

“Interior construction work is the unsung hero of the current building boom,” declares New York Building Congress president and CEO Carlo A. Scissura. “While all eyes are understandably focused on the brand new office and residential towers that are piercing the New York City skyline, an extraordinary amount of important construction work is occurring, largely under the radar, throughout the five boroughs.”

Commercial building owners have invested the most in A&R in each of the past six years. The sector, accounted for 46% of all permits by value in 2016, which is in line with the six-year average of 45%.

The driver of such development has been office construction. As a result of landlords making upgrades to their buildings and individual tenants building out or renovating their spaces, office work has accounted for more than 70% of all commercial A&R permits and approximately one-third of all A&R permits over the past six years.

“Throughout New York City’s existing inventory of nearly 500 million square feet of office space, landlords and tenants are investing billions of dollars to make their spaces more efficient, sustainable, and technologically-advanced,” adds Scissura. “They are doing so partly in response to increased competition from newer buildings and the evolving demands of the 21st century workplace.”

Institutional work, which includes public schools, higher education, hospitals, entertainment and cultural facilities, and government buildings, is the second biggest driver of A&R work throughout the five boroughs, accounting for 35% of all A&R permits by value last year and about 34 % over the past six years.

Multifamily apartment buildings accounted for approximately 16% of all A&R permits issued in 2016, as well as over the past six years. Meanwhile, hotels typically cost more to renovate than office buildings, while fit-outs of stores are much less costly than office space improvements.

Across all building types, the most expensive upgrades entail miscellaneous nonresidential structures, like improvements to transit stations and park facilities.

Manhattan accounted for nearly 70% of all A&R permits by value in 2016, due to its 93% share of the office work. Brooklyn was a distant second in total A&R work at nearly 13%, followed by Queens at 9%, the Bronx at 7%, and Staten Island at 1%.

Manhattan also led the institutional sector last year with 55 % of the A&R permits by value.  Brooklyn placed second at 16%, followed by the Bronx at 14 %, Queens at just under 14%, and Staten Island at less than 2%.

In the commercial sector, Manhattan led with 86 % of A&R permits by value, followed by Brooklyn at 8%, Queens at 3%, the Bronx at 2%, and Staten Island at 1%.

The residential sector followed roughly the same order, with Manhattan accounting for nearly 58% of the work, followed by Brooklyn and Queens at 17% each, the Bronx at 7%, and Staten Island at less than 1%.

 

 

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