December 20, 2007

Construction put in place is expected to grow by 5.8 percent next year, despite a decline of 3.7 percent in 2007, according to a new report.

The report, 2008 U.S. Construction Overview, forecasts that in 2008, construction put in place will total $1.21 trillion, about 9 percent gross of domestic product. That means that the health and direction of the construction market matters not only to firms directly in the construction industry, but also to the overall economic health of the country.

“The 2008 construction forecast is generally positive and many sectors of the construction industry will remain healthy, despite the continuing drag of the housing downturn,” says Heather Jones, construction economist for FMI’s Research Services, which conducted the report. "In terms of trends, the aging of the population, immigration and deteriorating infrastructure will drive much of this growth. The health care, public safety, office and transporation segments will see the strongest growth in 2008.”

New York, N.Y., December 11, 2007

Turner Construction Company, the nation’s leading general builder, today announced that construction costs increase in the Fourth Quarter. According to the Turner Building Cost Index, the Fourth Quarter 2007 Index value is 876 which represents a 1.51 percent increase in construction costs over the Third Quarter 2007 and a 7.09 percent increase over the Fourth Quarter 2006 index. Turner has issued this quarterly forecast for more than 80 years.

According to Karl F. Almstead, the Turner vice president responsible for the Turner Building Cost Index, “Activity in the non-residential construction market remains strong in spite of the residential mortgage sub-prime issues and concerns over its impact on the credit markets. In many markets, the large volume of work has stretched the available labor and trade contractor resources driving construction cost increases. From the materials perspective, commodity prices have eased slightly over the past quarter, but global demand, especially from the emerging economies, continues to drive an upward trend in prices. Manufacturing and transportation cost increases, reflecting increased energy costs, have also added to the escalation of construction costs.”

“The market remains strong and the factors that have influenced the almost double digit escalation of the past three years are still in the market. However, the market has eased from the hyper levels of activity to levels that are better supported by the industry resources.”

October 24, 2007 From Grubb & Ellis Co.

According to Grubb & Ellis during a morning news conference in New York City, the slowing economy should cool down the U.S. commercial real estate market in 2008, but the four main real estate sectors should remain relatively healthy next year.

On the positive side, office development has been under control according to Bach. Net office absorption should remain positive-about 48 million square feet in 2008, off by about 20 percent from 2007. Bach predicts office vacancy by the end of next year should be 13 percent, about the same level as this year.

Rental rate growth in office properties nationwide should decelerate next year, rising from 0 to 5 percent. Bach named Portland, Ore., and Seattle as hot office markets, as well as San Francisco, while San Jose's office inventory has been strengthened by the tech revival. Bach also noted that office vacancy in Los Angeles County has continued to fall, and is now below 10 percent, but its neighboring office markets, such as Orange County, the Inland Empire and San Diego could feel some pain due to the housing slump.

Vacancy was lowest in Manhattan at 4.9 percent and highest in Detroit at 21.7 percent among the major markets tracked in detail, according to Grubb & Ellis. Over the past four quarters, vacancy fell most sharply in San Mateo (the San Francisco Peninsula), Houston and Austin along with a handful of smaller markets.

Vacancy rose most sharply in Orange County, Palm Beach County and the Inland Empire (the Riverside area east of Los Angeles), all of which have a high percentage of office tenants related to the weak housing sector.

Net absorption in the first quarter totaled 15.7 million square feet, consistent with a moderately expanding market but at the low end of the recent range.

Retail leasing rates should stabilize in 2008 according to Michael Dee, Grubb & Ellis' senior vice president. While leasing at regional malls should continue to remain strong, some strip centers may see some increase in vacancy. Retailers that are dependent on the housing sector, such as home furnishings stores, could see slowing sales, he said.

December 15, 2006 From American Institute of Steel Construction, Inc.

Demand for structural steel on construction projects in the United States will continue to grow in 2007, according to industry forecasts. The American Institute of Steel Construction (AISC) projects a growth in tonnage demand for structural steel of 2% in 2007.

Members of the structural steel industry at every level of the supply chain are taking steps to ensure that supply continues to meet the expanding needs of the construction industry. The domestic production capacity of structural steel will increase by 10% in 2007 as a result of mill expansions currently under construction.

Notable areas of growth in demand for structural steel in 2007 will include industrial and warehouse projects; parking; schools and universities; and public sector projects. The 2007 forecast shows a continuation of the trend in recent years towards increased usage of structural steel on projects of every description. Overall, forecast data also shows continued growth in total construction volume, with 2007 projected to equal the previous peak of 1.94 billion square feet achieved in 2000.

Industry reports also indicate growth in demand for structural steel on projects not traditionally included in national building square footage statistics, such as power plants, petrochemical and ethanol facilities, processing facilities and non-roofed stadiums, among others.

Roger Ferch, president of AISC, commented, “Structural steel continues to be the material of choice on building projects throughout North America. With continued growth in demand projected for 2007, members of the industry—from mills and service centers to fabricators and erectors—are making sure that structural steel remains readily available for every type of project.”

WASHINGTON, DC - December 12, 2006 From Building Owners and Managers Association (BOMA)

The Building Owners and Managers Association (BOMA) International and the U.S. Green Building Council (USGBC) announced the signing of a Memorandum of Intent (MOI) to work cooperatively to promote energy efficiency and environmentally responsible building operations and maintenance practices to the BOMA community of building owners, operators and property managers who collectively represent 9 billion square feet of commercial real estate. The announcement was made at the recent Greenbuild Conference and Expo held Nov. 15-17 in Denver.

Among the initiatives outlined in the MOI are joint promotional activities including collaboration at BOMA's North American Commercial Real Estate Congress® and The Office Building Show in New York City in July 2007 and USGBC's Greenbuild Conference and Expo in Los Angeles in October 2007, as well as joint educational offerings including Web-based seminars on energy efficiency and green building practices. BOMA will be working with USGBC as a Top-Tier partner, one of a very exclusive group of organizations including the Urban Land Institute and the American Institute of Architects that recognizes the tremendous need for moving real estate to a more sustainable approach. As a Top-Tier Partner, BOMA will be working directly with USGBC on program development for Greenbuild 2007 and beyond.

"This collaboration with USGBC reflects the commercial real estate industry's continued and growing commitment to promoting energy efficient and environmentally responsible buildings," said BOMA International Chairman and Chief Elected Officer Kurt R. Padavano, RPA, CPM, FMA, SMA, and chief operating officer of Advance Realty Group of Bedminster, NJ. "Working together to promote sustainable practices not only provides a healthier and more productive workplace environment, but also creates a tremendous potential for energy savings and reduced emissions."

"Collaboration and sharing best practices are the keys to success," said Rick Fedrizzi, president, CEO & founding chair, U.S. Green Building Council. "BOMA is one of the most respected and influential organizations in the building industry, and we are proud to be partnering with them to help further green building practices in the commercial real estate sector."