- CRE Daily
- Posts
- NYC Tops Global List for Construction Costs
NYC Tops Global List for Construction Costs
Construction costs in New York hit $534/SF—highest globally—as labor shortages and trade pressures tighten U.S. supply chains.
Good morning. We’ve got something a little different to share today—something we’ve been quietly working on behind the scenes.
Since day one, this community has helped turn CRE Daily into what it is. And now, we finally get to bring it together (in person).
On Tuesday, November 4, we’re hosting our first-ever live event in Dallas.
We’re calling it Night Cap.
It’s not a conference. And it’s not a stuffy happy hour. Just a relaxed evening with a small group of investors, developers, lenders, and operators—good food, live music, and real conversation under the Texas stars.
It’s 100% free for CRE Daily readers, but space is capped at 300 people.
Hope to see you there.
Jordan Berger
Co-founder / CEO @ CRE Daily
Market Snapshot
|
| ||||
|
|
CONSTRUCTION TRENDS
Building in America Just Got Pricier — NYC Leads the Pack
Construction costs are hitting all-time highs as labor shortages and trade pressures tighten U.S. supply chains.
The price to build: New York City now ranks as the most expensive city to build in globally, with average costs at $534 per square foot, according to Turner & Townsend. San Francisco follows at $512, and Los Angeles at $445. High labor costs and a widespread shortage of skilled tradespeople are the main drivers behind the spike.
Trade policy: While the market has stayed resilient under shifting U.S. trade policies, nearly 50% of industry professionals expect worsening supply chain conditions over the next 12 months, according to Turner & Townsend’s survey.
Rising inflation risk: Material costs and labor shortages are expected to drive construction cost inflation to 5% in some U.S. markets in 2025—up from 4.7% in 2024. The compounding pressures are making it harder to keep projects on budge
Holding firm: Construction demand remains solid, especially in space-constrained cities like NYC and Chicago. Developers are turning to retrofits and refurbishments over new builds, while fast-growing data center construction in markets like Atlanta and Austin is pulling talent from other sectors.
➥ THE TAKEAWAY
Big picture: Developers will need to embrace digital tools and new delivery models to stay competitive. Without real innovation, high costs and a strained labor pool could stall momentum across U.S. markets.
TOGETHER WITH INVESTNEXT
The Untapped Opportunity for Mid-Sized GPs
$7 trillion in retail capital is entering alternatives through 2032, and many of these investors are looking to invest in real estate.
Yet most mid-sized GPs are still focused on institutional fundraising.
Here's what the data shows:
70% of high-net-worth individuals would invest in alternatives if properly approached
Retail investors represent only 16% of alternative AUM despite holding 50% of global investable assets
Industry reports show mid-market funds demonstrating stronger momentum with retail investors than mega-funds
The firms that understand retail investor expectations and act accordingly will capture new capital sources while those that don’t will miss out on this massive opportunity to acquire new investors.
Download your copy of How to Capture Retail Investor Capital.
*This is a paid advertisement. Please see the full disclosure at the bottom of the newsletter.
✍️ Editor’s Picks
Cash for space: WareSpace is buying industrial, flex, and retail: 50–250K SF with near-term vacancy. Fast closings, all cash—and a $1/SF broker bonus through 12/31/25. (sponsored)
CRE rally: The LightBox CRE Activity Index jumped to 113.9 in June—its highest level since May 2022—driven by a rebound in listings, appraisals, and due diligence.
A new era: After years of rapid increases, cap rates are leveling off, hinting at a more stable net lease environment.
Slim chance: A new Fed study estimates a 9% chance that interest rates could return to zero within seven years.
Tournament towns: Billion-dollar youth sports complexes are transforming suburbs as cities and investors chase the $52B kids' athletics boom.
Cost crunch: NYC tops the global list as the most expensive place to build, averaging $534/SF.
Inflation dip: US consumers’ inflation expectations fell to 3.0% for the year ahead, as optimism about personal finances and job security improved.
GSE reform: Industry experts say Trump’s megabill may finally pave the way for Fannie and Freddie to exit conservatorship.
Compliance countdown: As NYC begins enforcing Local Law 97, building owners face rising compliance costs, limited guidance, and growing skepticism about fines.
🏘️ MULTIFAMILY
Rental opportunity: SFR and BTR investments are gaining momentum as rising home costs and slowed construction deepen the US housing shortage.
Green perks gone: HUD is flattening mortgage insurance premiums for multifamily housing, effectively eliminating special rates for energy-efficient developments.
Record completions: Multifamily completions hit 608K units in 2024, the highest level since 1986, driven by high-density, built-for-rent units.
Sun Belt strategy: Slate Asset Management is acquiring 1,600 multifamily units across Florida, Georgia, and Arizona for $227M, betting on long-term rental demand.
Tower trade: Cedar Street and Kayne Anderson have acquired the multifamily and retail portions of the 47-story Millie on Michigan in downtown Chicago.
Foreclosure watch: A Miami Beach condo-hotel is facing a $21M foreclosure, adding to a growing list of high-profile South Florida properties under financial strain.
🏭 Industrial
Build-to-lease: Inland Empire leasing stayed strong in Q225, but rising vacancies and a 4.5% drop in lease rates signal softening in the core market.
Industrial automation: Nearly 90% of real estate and construction firms plan to boost AI and automation investment within two years, signaling rapid tech adoption across logistics and industrial sectors.
Meta moves: Meta has leased an entire newly built warehouse in Sterling, Virginia, to support its growing network of data centers in the region.
Facility exit: IBM and TT Electronics are shuttering their North Texas sites, cutting over 130 jobs amid consolidation and tariff pressures.
🏬 RETAIL
Youth magnet: Indoor malls are seeing a Gen Z–driven comeback, outperforming open-air shopping centers in foot traffic growth during the first half of 2025.
Ethnic anchors: H Mart is opening a 64K SF store in Sugar Land, its fourth Houston-area location, as Asian-focused retail surges.
Vintage value: With new retail construction slowed by high costs, aging strip centers are getting a second wind.
Brand split: Dollar Tree has finalized the $1B sale of Family Dollar to private equity, exiting a troubled acquisition that once cost $8.5B.
Grocery grab: Ram Realty Advisors has acquired a $200M, 600K SF portfolio of seven grocery-anchored shopping centers across the Southeast.
🏢 OFFICE
Conversion surge: DC office-to-resi conversions are gaining momentum as high vacancies, housing demand, and city incentives align to reshape underused buildings.
Loan pressure: CBRE simulations show most 2019-era office loans face a 35% funding shortfall upon refinancing, with just 10% of scenarios avoiding a gap.
Trophy trend: US office sales jumped 69% YoY, with investors flocking to trophy and Class-A properties, especially in California markets.
Tech anchor: Nvidia is nearing a 100K SF lease at One Uptown in Austin, signaling renewed confidence in the city’s tech corridor.
Lab relocation: Foghorn Therapeutics is relocating from Cambridge to a 73K SF lease in Watertown, opting for newer, purpose-built life sciences space.
🏨 HOSPITALITY
Investor optimism: Hotel stocks rose for a second straight month in June, up 3.7%, though still trailing the broader S&P 500.
Big deals: Despite a sluggish market, some high-profile US hotels commanded hefty price tags in the first half of 2025.
Icon update: Ben’s Chili Bowl will temporarily close its original DC location for major repairs—the first in over 60 years—with reopening expected in November.
Tech venue: Cosm is launching its fifth immersive LED dome venue in downtown Cleveland, aiming to boost the city’s sports and entertainment scene.
📈 CHART OF THE DAY

71.3% of US mortgage borrowers have an interest rate under 5.0%.

You currently have 0 referrals, only 1 away from receiving Multifamily Stress Test Model.
What did you think of today's newsletter? |
Reply