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Times & Trends: The New America

All business is local, but some mega-trends fuel much of the new construction now underway.

As EW’s editors looked over the fastest-growing markets in the United States for this month’s cover story, “It’s Market Planning Time” (page 12), we were struck not only by how many billion-dollar mega-projects are changing the landscape of many cities, but how three key trends are driving much of this construction. Here’s a look at them.

Gateway projects that redefine how visitors and residents “see” a city. Two of the biggest examples are in the Big Apple — the $8 billion demolition and reconstruction of LaGuardia Airport and the $5 billion redevelopment of the midtown U.S. Post Office into the entry hall for Penn Station, one of the busiest mass transit hubs in the United States.

LaGuardia Airport handled 29.8 million passengers in 2016, and when they arrive many of them may have agreed with former Vice President Joe Biden that some of the terminals  look like they are part of the airport of a third-world country. The project is well underway and if completed as planned by 2021, will redefine the experience business travelers and tourist have when they enter New York.

About 10 miles away, construction is starting on what may be the most innovative mass transit project in the nation — the conversion of the James A. Farley Post Office into the Moynihan Train Hall. It will reconfigure much of today’s dingy Amtrak-Long Island Railroad station beneath Madison Square Garden at 34th St. and move it one block over into the post office building  to create the new Moynihan Train Hall, giving new life to one of the finest examples of Beaux-Arts architecture in the Big Apple.

Visitors will enter a soaring atrium with sweeping views of the New York City skyline, a far cry from their first view of New York when they step off of trains in Penn Station today,  where they see a dirty cavern caked with grime, dim lighting, cheezy tourist stands, fast-food restaurants and overflowing trash cans.

Repurposing underutilized areas of cities. Urban redevelopment projects have been going on forever, but few can compare in scope to the revitalization of Boston’s Seaport district, where acres of parking lots and abandoned warehouses are being transformed into billions of dollars in new office, retail and residential construction projects. These projects include a new global headquarters for Vertex Pharmaceuticals that’s been open since 2014; an office tower for PricewaterhouseCoopers; a new corporate headquarters for GE still in the planning stages; and a new 1,000-room Omni hotel project that in total will bring $550 million in construction to the area.

Manhattan’s Hudson Yards development transformed similarly underutilized real estate, as has Washington, D.C.’s Capitol Riverfront project, where over the past years tenants including CBS Radio, the National Association of Broadcasters and Lockheed Martin have moved to the area near the Washington Nationals’ major league baseball stadium.

Tech hubs. A whole new tech economy has emerged from the ashes of the Dot-com boom, thanks to advances in smartphones, social media and other web-based industries. The tech economy has expanded far past the personal computer, semiconductor and telecommunications industries that were the foundation of historically tech-heavy metros like Silicon Valley’s San Jose, CA; Seattle’s Amazonia and Microsoft campus; Boston’s 128 beltway; and Austin, TX.

Newer tech clusters have sprung up over the past decade, including Dallas-Ft. Worth’s Silicon Prairie; the pocket of tech security firms that feed off of government business in the DC metro; San Diego’s biotech industry; new tech startups in Pittsburgh by graduates of nearby Carnegie Mellon and the University of Pittsburgh; and Manhattan’s Silicon Alley. Tech growth has a direct impact on the construction market because of the robust demand it creates for new office space needed by growing tech firms.

Why it’s all important to you. While the construction activity fueled by these three trends may be on a grand scale compared to many of the metros you serve, when you start developing your own strategic market plans for 2018, always take the time to analyze the key economic drivers for your local markets. You may uncover some economic trends — positive or negative — that you will need to factor into your growth strategies.

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