The US real estate market has been buoyed by news that the Hudson Yards project, to be developed in Manhattan’s West side, will be the largest real estate development in the US since the Rockefeller Centre built back in the 1930s. While this in itself is no mean feat it is extremely innovative and could be a sign of things to come.
So what is special about the Hudson Yards project?
In simple terms the development will create an enormous 17,000,000 ft.² of residential, commercial and retail development spread over 28 acres. Aside from the 100 shops which will be built there will be a phenomenal 5000 new houses with the first commercial property set to open in 2016, a 52 story development. So, this very large development itself is well worthy of the headlines it is attracting but there is more!
The vast majority of this massive development will be located on a specially built platform over an existing and fully operational train yard. Yes, due to the ongoing demand for urban residencies we have now reached a situation where properties are being built on top of other developments!
Is this a sign of things to come?
The United Nations forecasts that by 2050 more than 66% of the worldwide population will live in urban areas compared to 54% at this moment in time. There is obviously one major magnet for those looking to live within these urban areas, employment. Despite the fact that the Internet has taken the world by storm it seems that the major employment opportunities are still centred round major urban areas. Whether this will change in the longer term remains to be seen but with yet more urban properties required to house the worldwide population it seems this will be a focal point for the real estate sector going forward.
It will be interesting to see how governments around the world react to this development and whether indeed green regulations are relaxed and more companies are encouraged to base their offices outside of the major urban areas. There are many other factors to take into consideration such as pollution which is already a major problem in some of the world’s larger cities.
Who will dictate the future real estate market?
While the real estate market is worth a phenomenal amount of money to the worldwide economy the simple fact is that real estate developers have to follow the crowds. They have to develop their properties in areas which are attractive to would-be buyers and in essence this is employment hotspots. Government grants and a favourable review of green regulations may have an impact but the fact remains that people will always follow employment.
When you bear in mind that the Hudson Yards project will cost upwards of $20 billion we can only estimate the ever-growing cost of developing urban properties going forward. It will be interesting to see whether this project is started and fully completed and whether indeed it is within budget. We have seen many false dawns in the US real estate market although the general opinion seems to be that this particular project should progress to full fruition.