Brandywine Realty Trust and Drexel University
Drexel University and the Brandywine Realty Trust just broke ground on the $287-million, mixed-use West Tower that will be part of the $3.5-billion Schuylkill Yards development planned for the University City neighborhood of downtown Philadelphia.

Tracking More Trophy Jobs

Aug. 6, 2021
Downtown redevelopment and the construction of student housing and hospitals stand out in an otherwise soft 2021 construction market.

Although many of the indicators that measure the health of the overall construction market are mixed so far in 2021, a variety of interesting projects have broken ground in recent months, particularly in the multifamily, hospital, and college/university markets. Other than these segments, however, much of the construction market remains soft.

What’s stunting its overall growth? Labor shortages and the high cost of materials are the main reasons, according to Richard Branch, chief economist for Dodge Data & Analytics, in his analysis of construction market conditions at mid-year.

“The recovery from the COVID-19 pandemic has begun but is very uneven,” he says. “Commercial construction has been buoyed by strength in the warehouse sector as large e-commerce companies build out their logistics infrastructure while office, retail, and hotel activity is subdued. Multifamily starts, meanwhile, have rebounded solidly following a weak 2020. The dollar value of commercial and multifamily starts should continue to improve over the coming six months. However, growth will remain muted due to high material prices and a shortage of skilled labor in the construction sector.”

Multifamily

New multifamily construction through June 2021 hit $99.09 billion an increase of 19.7% over June 2020, according to a recent U.S. Census Bureau report on construction spending. Some of the large construction projects contributing to this increase (see the Table below) include the $400-million Courthouse Commons project in San Diego and the $230-million Mather Senior Living Facility in McLean, Va.

Another large multifamily project will be the residential component of the $287-million mixed-use West Tower that Drexel University and the Brandywine Realty Trust are building as part of the $3.5-billion Schuykill Yards development planned for the University City neighborhood of downtown Philadelphia. The West Tower will include 326 apartments, and according to a Drexel University press release that announced the groundbreaking, the building will be a key part of Schuykill Yards’ master plan for 4.8 million sq ft in life science/lab and office space; 132,000 sq ft in retail space; and 1.9 million sq ft in residential space near the city’s 30th Street Amtrak Station.

Another multifamily project of note is the 303 Battery Apartment Tower that Sustainable Living Solutions (SLI) is building in Seattle. SLI is touting the 112-unit structure as “the world’s most sustainable high-rise apartment building” because it will meet net-zero energy requirements. An SLI press release says there will be “solar on the building’s roof, exterior walls, and balconies; underfloor radiant heating in units; captured rainwater and reclaimed graywater; regenerative gear elevators; and daylight sensors to reduce power use throughout the building.”

Another interesting design feature for 303 Battery is the use of 900 premanufactured panels, which SLI constructs off-site with electrical wiring, plumbing, and mechanical equipment preinstalled.

Health care

At $47.5 billion in new construction spending and a 3.3% decline through June, the health care market segment isn’t currently showing the same amount of growth as the multifamily segment. However, several large hospital projects are now underway, including the $920-million, 690,000-sq-ft Michigan Medicine Clinical Inpatient Tower being built on the University of Michigan’s medical campus in Ann Arbor, Mich.; the $236-million UH Ahjua Medical Center expansion in Beachwood, Ohio, that’s part of $1.4 billion in medical construction across northeast Ohio; a 42.5-acre Flagler Health+ medical campus being built in St. Augustine, Fla.; and the 52-bed, 365,000-sq-ft Texas Children's Hospital now underway in Austin, Texas.

Colleges and universities

EC&M’s editors also spotted some sizeable dorm and classroom projects underway on college campuses. These include the $475-million University of California Living and Learning dorm project in San Diego; the $288-million Tarrant County College redevelopment project in Arlington, Texas; the University of South Carolina’s $210-million, 1,800-bed Campus Village in Columbia, S.C.; Vanderbilt University’s 615-bed housing project for graduate and professional students in Nashville, Tenn.; Lehigh University's 74,000-sq-ft College of Business building in Bethlehem, Pa; and the University of California’s 1,600-bed student housing tower on its Davis, Calif., campus.

Second-half outlook

Some construction economists agree that the second half of 2021 could be much busier than the first six months of the year if materials pricing and worker shortages don’t inject any additional uncertainty into the market, and if the United States gets a handle on the delta variant of COVID-19. Two leading indicators for the electrical market point to a stronger second half. Nationally, electrical contractors are employing 87,400 more workers in June 2021 than they did in June 2020 – a 9.8% increase in hiring. Another encouraging sign for electrical contractors, electrical engineers, facility maintenance personnel, and other electrical professionals is that architects are seeing more inquiries for their design services. According to the American Institute of Architects (AIA), its June Architecture Billings Index (ABI) (an indicator of future construction activity) was at 57 points on a scale of 100, and new project inquiries at AIA architectural firms logged another near-record high score at 71.8 points in June, compared to 69.2 points in May.

About the Author

Jim Lucy | Editor-in-Chief, Electrical Wholesaling & Electrical Marketing

Over the past 40-plus years, hundreds of Jim’s articles have been published in Electrical Wholesaling, Electrical Marketing newsletter and Electrical Construction & Maintenance magazine on topics such as electric vehicles, solar and wind development, energy-efficient lighting and local market economics. In addition to his published work, Jim regularly gives presentations on these topics to C-suite executives, industry groups and investment analysts.

He launched a new subscription-based data product for Electrical Marketing that offers electrical sales potential estimates and related market data for more than 300 metropolitan areas. In 1999, he published his first book, “The Electrical Marketer’s Survival Guide” for electrical industry executives looking for an overview of key market trends.

While managing Electrical Wholesaling’s editorial operations, Jim and the publication’s staff won several Jesse H. Neal awards for editorial excellence, the highest honor in the business press, and numerous national and regional awards from the American Society of Business Press Editors. He has a master’s degree in communications and a bachelor’s degree in journalism from Glassboro State College, Glassboro, N.J. (now Rowan University) and studied electrical design at New York University and graphic design at the School for Visual Arts.

Voice your opinion!

To join the conversation, and become an exclusive member of EC&M, create an account today!

Sponsored Recommendations