Cost of Building in New York Is Nearly Triple That of Chicago or Atlanta, Report Finds

The New York Sun reports:

Constructing a square foot of office space in New York City costs almost three times as much as it would cost in Chicago, Atlanta, and other American cities, according to a report being released today.

Just as spending for nonresidential construction has surpassed $1 trillion annually across the country, the costs associated with construction in New York City — materials, labor, and city permitting delays — have made it far and away the most expensive city to build in in America, a report being released today by the New York Building Congress and New York Building Foundation says.

"That is a huge differential," the president of the Real Estate Board of New York, Steven Spinola, said yesterday when told of the report's city-to-city cost differentials. The report estimates that a square foot of office space for a high-rise in New York can exceed $400 a square foot, not including marketing, land costs, or the developer's profits.

The total project costs, including soft costs, can average $150 a square foot in Chicago and $120 a square foot in Atlanta.

The report's findings come at a pivotal moment for New York's construction industry.

It's hard to compete over time when you are the high cost place.