New York City's market for raw development sites is shifting, and the shift changes who gets paid first on a deal, according to Commercial Observer.
Commercial Observer reported October 20 that site acquisition in the city is increasingly tied to value created through entitlement and design work rather than land price alone, citing brokers and developers active in the market.
Here's what that means on the ground. A buyer used to pay for dirt and air rights, then hand the job to an architect and a GC once the deal closed. Now, according to the report, more of the value — and more of the fee — is getting captured before closing, through pre-purchase zoning work, environmental review positioning, and massing studies that de-risk a site for a lender.
That has a direct contractor angle. If entitlement work is happening earlier and carrying more of a deal's value, the window where a GC or pre-construction team gets pulled in to price options is moving earlier too. A site that used to hit the market already entitled, ready for a GMP bid, may now come to market mid-process, with the eventual builder brought in during the zoning fight instead of after it.
New York City Department of City Planning's public land use review (ULURP) calendar — the official record of what's moving through zoning and when — is posted at www.nyc.gov/site/planning/applicants/applicant-portal.page, and it's the primary way to see which sites are in that earlier window before a bid package ever gets cut.
This story was first reported by Commercial Observer.