Are projects in your city pausing after groundbreaking due to construction costs?

[mhays]

Seattle's tallest all-residential project, Civic Square, was just put on hold after a few months of shoring and excavation. This say this is due to extreme volatility in construction pricing (which tend to be related to Covid- and Ukraine-based supply chain and commodity issues along with a paradoxically busy market).

Has your city had similar pauses?

I'm not talking about Amazon pausing one of their Bellevue towers that was scheduled to break ground soon, or their decision to delay interior buildouts in five other Bellevue towers under construction.

Nor am I talking about planned project sites that demo then wait. We're getting a lot of those too, since a new rule allows demolition without imminent construction as a reaction to homeless starting fires.

Nor ceremonial groundbreakings where they're not at least putting steel into the ground.

Just real start-then-stop scenarios.

[JManc]

I walked by that spot yesterday and wondered what was going up there. Now I know. Nothing.

[mhays]

The longer story is it's a City-owned site that demo'd down to basement level in 2007 and sat for 15 years and multiple developers before finally starting construction.

Winning a deal with the City means promising all sorts of public "betterments" that make projects hard to pencil. Being in the government/financial district in a post-Covid world doesn't help, particularly for a condo. It's not clear whether the housing market plays into the delay, but if so rentals might be a better option than condos...young lawyers on 100-hour schedules will love living there, but buying takes a long-term leap.

I'm guessing they'll be on track within a year, maybe two.

[JManc]

I worked on a basketball stadium owned by both city and county and remember the hoops GC and architects had to jump through. That was over 20 years ago and can't imagine red tape today.

[pdxtex]

That was Portland last recession. We had a giant hole in the middle of downtown for nearly 5 years. Things now seem full steam ahead even tho downtown offices are quickly being vacated. The new Ritz Carlton has almost topped out. Its looking pretty sweet. Tons of tourists are walking around too so I'm not sure where we are on this bizarro timeline.

[mhays]

To clarify, we still have projects breaking ground constantly in the greater Downtown area, including tons of apartments and a surprising amount of offices. Yet a lot of projects are waiting at the gate for pricing to cool down and this one has stopped mid-stream.

Others stopped during Covid (some also related to updated permits after upzones) but they've all restarted iirc.

[Klippenstein]

Well, the closest comparison in Chicago might be that the Chicago Spire foundation is still just a hole in the ground since the last recession with plans to develop into two towers. We will see if they actually break ground late this year or early next as has been suggested.

[Steely Dan]

^ an even closer comparison in Chicago might be 1000M.

It's an 805' residential tower in the south loop that began foundation work in late 2019, and then ground to a halt about 6 months later after the caissons were completed. The developers blamed covid, but the real reason was that they were never able to close on a full loan.

Then last winter, after a roughly 18 month hiatus, they were finally able to get the loan and construction resumed and the tower is now finally heading into the sky.

It's kind of an important one too because it'll really help fill a giant skyline gap in the south loop.

[austlar1]

There are seven or eight large projects underway in downtown Austin. Several of them are very recent starts. One is a super tall mixed use and another one is a 700 foot plus office-only project. The others (almost all in the 500 to 600 foot range) are mostly apartment projects. There are also several buildings in the pipeline and a couple nearing completion, including one 875 foot office/apartment tower. I keep expecting the other shoe to drop on some of these projects, given the current economic uncertainty, but, so far, everything is chugging along.

[The North One]

Wouldn't construction materials be ordered well before groundbreaking?

[lio45]

Originally Posted by JManc

I worked on a basketball stadium owned by both city and county and remember the hoops GC and architects had to jump through.

Anyone would expect lots of hoops, it’s a basketball stadium!

[mhays]

Originally Posted by The North One

Wouldn't construction materials be ordered well before groundbreaking?

Typically most sub-trades are bought out by then, yes. At least the earlier, larger, and riskier packages.

But it's possible to start with less bought out. That can even be a tactic if you thought in January or March (for example) that prices would come down by July.

Also, subs can't be expected to take all of the risk if material prices spike and workers aren't available. Subcontracts are being written with more flexibility to get paid for price spikes in some cases. Even if the contract prices are ironclad, developers and generals don't want their subs to go out of business or fail to perform.

There's also a worker-availability factor, particularly in busier and more expensive cities.

[SpawnOfVulcan]

Nope. Things are quite busy. I work at a natural gas distribution company and we can barely keep up!

[kingkirbythe....]

Originally Posted by austlar1

There are seven or eight large projects underway in downtown Austin. Several of them are very recent starts. One is a super tall mixed use and another one is a 700 foot plus office-only project. The others (almost all in the 500 to 600 foot range) are mostly apartment projects. There are also several buildings in the pipeline and a couple nearing completion, including one 875 foot office/apartment tower. I keep expecting the other shoe to drop on some of these projects, given the current economic uncertainty, but, so far, everything is chugging along.

Humble brag.

[The ATX]

We have more and significantly taller projects U/C and awaiting approval than ever before in Austin. We have 12 towers between 500' & 1,000'+ U/C now. But economic downturns happen at peak cranage. Not sure if this is it or not, but I hope not.

[Nite]

No projects are stopping in Canada after groundbreaking because projects here do not get financing without selling 70% of the project or a long term rental contract is signed for commercial developments.
The only time a project is stopped is when the developer goes bankrupt and in which case the property is usually sold to another developer to continue to build it. of the 227 highrises under construction in the city of Toronto 2 (in the same development) are suspected of being on-hold but those are related to issues in China by the Chinese developer as the development is mostly sold and the developer has not stated it's on-hold.

[mhays]

Seattle doesn't build many condos, and presales mean less regardless.

In Canada you can demand a huge deposit, but here it's $10,000 max iirc. That means banks don't consider presales very convincing. In 2008 people were just walking away en masse.

We also have severe condo liability laws so most developers, architects, and contractors don't do them.

[dave8721]

I can't think of any projects that stopped after groundbreaking due to cost increases. A bunch decided the projects didn't pencil out and never broke ground at all. Or are waiting it out.

[Nite]

Another reason I don't foresee any under construction projects being in jeopardy in Canada and in Toronto specifically.

Originally Posted by kora

Immigration by metro area (CMA and MSA), 2021, top 10

Toronto: 142,775
New York: 101,708
Vancouver: 53,925
Los Angeles: 50,960
Miami: 49,288
Montreal: 40,360
Washington: 27,636
Houston: 26,146
Dallas: 25,710
San Francisco: 24,670

US Lawful Permanent Residents: 2021 (US Dept of Homeland Security)
https://www.dhs.gov/sites/default/fi...s_fy2021_0.pdf

Permanent Residents – Monthly IRCC Updates - Canada - Admissions of Permanent Residents by Province/Territory and Census Metropolitan Area (CMA) of Intended Destination (Open Data, Government of Canada)
https://open.canada.ca/

[TWAK]

Hard to have true construction costs when everything is a manufactured or trailer home, to include restaurants.