Construction firms are banking on building office spaces to see them through the sluggish market.
Recently, Brookfield Office Properties, a construction firm held a ground breaking ceremony to celebrate the commencement of two office towers that it plans to build on the five-acre land sitting on the far west side of Manhattan. The land was purchased for $680 million backed by a loan from a group of lending associations, reports The Wall Street Journal.
Along with Brookfield Properties, Related Co. another construction firm is also building an office tower at the Hudson Yards on a 26-acre site. The first tower will be occupied by Coach, a handbag manufacturing giant once the construction is complete.
Another real estate construction investor, Hines is teaming up with Ivanhoe Cambridge to build a 45-story office tower in Chicago. Construction on the building is expected to start in the first quarter of 2013.
Builders are optimistic about luring in new companies and old ones as well. They are banking on companies with expiring leases to move in to these spaces.
"It's a race to see who can get the anchors out there. There aren't enough tenants for everybody to be able to build their buildings." Bill Rogers, a broker with Jones Lang LaSalle, a global real estate firm told WSJ.
However, office spaces are bound to do well in Silicon Valley and San Francisco as a lot of tech companies are located in these areas. New Start-ups are likely to occupy spaces where huge companies are located in order to gain popularity.
