Real estate and the construction sector are linked by a double plot. By now it is well known that one can only influence the other, constantly. And even in this period, when the situation at world level is really complex, there are clear signs of this indissoluble bond.
This time, the focus of our column is New York. Indeed, the Big Apple has decided to apply an extreme policy to combat the problems arising from the Coronavirus. In fact, we know that it is America, at the moment, which is the country most affected. Both in terms of the number of deaths and, above all, the rate of infection. So let us find out together how the construction sector in New York has responded to this phenomenon. Let us begin!
In one of the most populated cities in the world, the economy is about to be put to the test. Unfortunately, this is not the beginning of an apocalyptic film. The reality is exactly that. The construction industry moves $66,000 million annually in New York City. A very considerable value, but it has received a stop. With the rampant Coronavirus, in fact, precisely to deal with the emergency, the local authorities have imposed isolation but above all the cessation of all non-essential activities. Unfortunately, the construction sector seems to fall into this category, which needs to hibernate.
The problem with the stop sign is not the stop sign itself. But it is a blockade that took place during an extremely prosperous period for the sector. Some 450 construction works were temporarily halted. And that is not all. These include very important projects in the luxury real estate sector. These include the Billionaires’Row area and the transformation of the area around the Grand Central Terminal. What causes this interruption? Undoubtedly a chain reaction, starting with delays in the delivery time of the completed project, to the postponement of payments to suppliers and also to contractors. But that’s not all. There are also the large creditor banks at stake, which, of course, fear excessive delays in the payment of loans by the sponsoring companies.
As far as the potential recovery of the sector is concerned, unfortunately, there is not enough data to establish this. Furthermore, we are talking about purely financial aspects, but these also affect the confidence of potential investors. Doubts are growing and the projects in the pipeline are beginning to take funds and interested creditors. In addition, we should remember that, in some cases, lengthening the time frame means seriously jeopardising the success of a project that has already started.
Even according to the main experts in the field, it is still too early to be able to give a timeframe. What is certain is that, of course, it is not only the real estate and construction sectors that are suffering. But all the activities associated with them.
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