By Atticus O’Brien-Pappalardo
New York City developers filed plans for 2.8 million square feet of new construction in March, about the same as the prior month, as the impact of the coronavirus extended into all sectors of the city. While that total volume was down from the average over the past 15 months of 3.4 million square feet, it was the highest figure in the past five months.
As the total square feet ticked up slightly, the number of residential units filed for also rose, to 2,713, though a bit below the average over the past 15 months. The number of projects fell, however. There were 59 projects of all kinds filed last month, compared with 81 filed in February. PincusCo looked at all new building (NB) filings of 2,000 square feet and above. For residential buildings, the analysis covered those with four or more units.
The amount of new construction is a measure of developers’ anticipation for demand in the future. As of March, that demand was holding steady, but it is expected the number of filings will decline as lending dries up, construction is halted and the complexities of designing projects remotely become overwhelming. To get an idea of what might happen, PincusCo compared filings over the past 15 months with a similar 15-month period from 2008 and 2009, when the city was battered by the collapse of Lehman Brothers and the ensuing wider financial crisis.
Despite the virus’ impact on the workforce, such as many construction sites coming to a total standstill, the number of new building application filings submitted in the month of March weren’t significantly lower than what we’ve seen over the course of the first quarter. That is likely to change.
During the 2008 real estate crisis, the most significant drop in new building development filings came in July of 2008, over a year after the real estate market began noticeably declining. From June to July of 2008, the number of pre-filings dropped by 50 percent, total square-feet across all filings dropped over 50 percent, and total residential units across all filings dropped over 50 percent.
In spite of the current industry turmoil, there were numerous large filings in March. Last month, developers filed seven plans for buildings over 100,000 square feet and four of those were over 250,000 square feet.
Gotham Organization filed the largest building plan last month, on March 6. It calls for the construction of a 377,000-square-foot residential building at 60 Norfolk Street in the Lower East Side, that will have 366 apartments.
The second largest filing came from Taconic Investment Partners on March 9, in the form of a 294,000-square-foot mixed-use building at 312 West 43rd Street in Midtown West, with 321 apartments. Rounding out the top four are BFC Partners, which filed plans for a 293,000-square-foot residential building in Coney Island at 1607 Surf Avenue on March 4 that will have 376 apartments, and Tavros Capital, which filed for a 288,000-square-foot residential building at 45-03 23rd Street in LIC on March 9, which will have 285 units.
While the biggest projects of the month were filed in the first two weeks before the city’s bars and restaurants were ordered closed, there were significant projects filed later in the month, after the city fell under a stricter order to close all non-essential businesses, on March 20. Those filings included Diamond Property Management’s 154-unit project at 299 East 161st Street in the Bronx and Toll Brothers’ 73-unit development at 2686 Broadway on the Upper West Side.