The Dodge Momentum Index fell in September, moving 8.4% lower to 116.4 (2000=100) from the revised August reading of 127.1.The Momentum Index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year.
However, one of the most significant positive projects relates apparently to Google’s massive plans for a new $200 million San Jose office complex.
Both components of the Momentum Index declined in September. The institutional building component fell 11.5% from August, while the commercial building component fell 6.1%.
While the overall Momentum Index has lost ground for four consecutive months, this should not be seen, in and of itself, as a predictor of a turn in building markets. Prior to the previous peak of the Momentum Index in January 2008 it had suffered similar significant declines, only to rebound and post strong gains in subsequent months in line with overall economic growth.
Similarly, the Momentum Index posted healthy gains from late-2016 through early 2017. Economic growth remains solid, and building market fundamentals are supportive of further growth in construction activity.
In September, 10 projects entered planning each with a value of $100 million or more. For the commercial building sector, the leading projects were a $200 million office complex in San Jose CA and a $200 million mall in Staten Island NY. The leading institutional projects were a $400 million civic complex in Los Angeles CA and a $100 million casino in Tulalip WA.
Google is in talks to create a massive tech campus in the heart of downtown San Jose’s Diridon Station area that could accommodate up to 20,000 jobs and transform the area into a transit-oriented tech village, the Mercury-News has reported city officials as saying.
Google and the city are discussing a potential mixed-used development that could include more than six million sq. ft. of office and research-and-development space, potentially making it the company’s largest collection of tech offices.
It would be larger than the search giant’s roughly 3.1-million-square-foot Mountain View headquarters, known as the Googleplex, which currently is its biggest U.S. work hub. The largest single building occupied by Google is a company-owned office tower, a 2.9-million-square-foot art deco skyscraper in Manhattan.
Google ultimately intends to buy all the parcels in a roughly 240-acre area that would be needed for the mega-campus, said a person familiar with the matter.