'Major downturn' for construction

March 19, 2008
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HardhatWondering why development news seems to have ground to a halt? The nation's housing and economic woes are hitting development firms and slowing the demand for construction. The American Institute of Architects said in a study released today that "commercial construction across the country is experiencing a major downturn." A leading indicator of the demand for construction work fell to its lowest level since October 2001, leaving an average lag time of almost a year between architectural billings and construction spending. Some firms are paring their workforce; others are bidding on more stable projects such as schools, hospitals and government buildings. Construction costs are falling. What's next?
  • Cory, may you please try to update us on those two infill buildings on south Meridian Street? Thank you!
  • Now that the legislative session is over, seems like the new mayor might finally get around to deciding on tax abatements/public monies for some of the proposed major projects. Any thoughts on what will become of these: JW, MSA, PennCentre?
  • Unless I'm mistaken, the JW deal has already been inked. It was one of the last things the Peterson administration did and they consulted with Ballard to make sure he was onboard.
  • Another ray of sunshine from our beloved Cory.

    I'm actually surprised he didn't blame this downturn on Premier Properties!
  • Yes, the JW deal was set with Peterson. It will soon move to construction phase, I believe, but I know all the details have been signed off on (as of Dec 07)
  • So who is slow?
    Have you spoken with the local architectural/engineering firms? Local G.C.'s??
    Does Cory have information that is not being shared? There seem to be many jobs out for bid at this time and the dodge is full of things that are coming...so what was this based upon?
    Ahh...I re-read the article..AIA says we are down.

    Local news..it would be great.
  • The Wall street Journal article that I read was exactly opposite of this reports..showing commerical consttirction as being fairly strong in most cities.
  • Anyone else hearing what crownhilldigger is hearing? Are there still lots of jobs out for bid in Indianapolis?

    Many of the people I'm talking to are getting nervous about a low level of work available.
  • Well Cory I guess its you and me. Agreeably I disagree that there is a slow down locally and I base my input from direct solicitations that I made to principals within a couple of our top union and non-union GC's as well as w/their peers within 2 local AE firms.

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  1. PJ - Mall operators like Simon, and most developers/ land owners, establish individual legal entities for each property to avoid having a problem location sink the ship, or simply structure the note to exclude anything but the property acting as collateral. Usually both. The big banks that lend are big boys that know the risks and aren't mad at Simon for forking over the deed and walking away.

  2. Do any of the East side residence think that Macy, JC Penny's and the other national tenants would have letft the mall if they were making money?? I have read several post about how Simon neglected the property but it sounds like the Eastsiders stopped shopping at the mall even when it was full with all of the national retailers that you want to come back to the mall. I used to work at the Dick's at Washington Square and I know for a fact it's the worst performing Dick's in the Indianapolis market. You better start shopping there before it closes also.

  3. How can any company that has the cash and other assets be allowed to simply foreclose and not pay the debt? Simon, pay the debt and sell the property yourself. Don't just stiff the bank with the loan and require them to find a buyer.

  4. If you only knew....

  5. The proposal is structured in such a way that a private company (who has competitors in the marketplace) has struck a deal to get "financing" through utility ratepayers via IPL. Competitors to BlueIndy are at disadvantage now. The story isn't "how green can we be" but how creative "financing" through captive ratepayers benefits a company whose proposal should sink or float in the competitive marketplace without customer funding. If it was a great idea there would be financing available. IBJ needs to be doing a story on the utility ratemaking piece of this (which is pretty complicated) but instead it suggests that folks are whining about paying for being green.