General contractors are suffering from delays in part due to the escalation in the trade war between the US and China. Asia provides the majority of steel imports with China being the primary marketplace. Such material comprises around 16% of the total building cost for a typical commercial project.
- Construction costs were already on the rise: The average building cost in New York is already $368 per SF, up from $362 per SF in 2018 (average labor costs are $101.30 per hour). Projects that were contracted prior to the tariffs have been presented with an even greater challenge as their budgets didn’t account for a trade war.
- Be Smart: With rising costs, many are turning to consultants. Seemingly trivial decisions (e.g. steel vs. concrete, type of mechanical systems, electrical distribution, façade materials) make a big difference.
- Heard on the Street: Eastbound Construction’s Alex Elkin: “This is important for both large development sites and value-add deals. Having someone oversee and direct all the moving parts (e.g. Contractor, architects, engineers, vendors, city agencies… etc) allows for greater efficiency and lower costs throughout the project.”