Two reports offer practical insight into commercial building market conditions and drivers, as well as investment and development prospects. The information on these pages was excerpted and compiled from New York City-based McGraw-Hill Construction's Construction, Outlook 2006 report, as well as from Emerging Trends in Real Estate[R] 2006, a report published by the Washington, D.C.-based Urban Land Institute and PricewaterhouseCoopers LLP.
According to Construction Outlook 2006: Over the past 2 years, the construction industry has dealt with a sharp increase in building-material costs--a situation that isn't helped by the upward pressure on prices following the 2005 hurricanes. It's now estimated that total construction in 2005 will have advanced 8 percent to $637 billion. And although 2006 features steeper price levels and interest rates, it will also include positives for the industry. The sum of various sectors produces a 3-percent gain for total construction. The 2006 environment will lead to some variation in the performance by major construction sector; new construction starts for 2006 are estimated to be $654 billion, a 3-percent gain over 2005.
Other key points from Construction Outlook 2006:
* Income properties (retail, office, hospitality, multi-family housing) will advance 7 percent in dollar volume and 3 percent in square footage. Hotel construction is anticipated to experience double-digit growth, while more moderate gains are expected for offices and warehouses. Multi-family housing is expected to be essentially stable on a square-footage and dwelling-unit basis. …
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