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In the housing bust, many glass manufacturers went out of business or mothballed operation.
Interestingly, condo towers and new skyscrapers are once again booming, but glass has not kept up. As a result, Cost of Skyscraper Glass Hits Dizzying Heights.
A shortage of glass is taking a toll on the nation’s commercial building boom, adding millions of dollars to the cost of new skyscrapers and halting some projects midway through construction. Apartment buildings are sprouting up at their briskest pace in decades, and new office towers are rising in major markets like Manhattan at the fastest rate since the early 1990s.Leap of Faith
Restarting idled glass factories is a costly and time-consuming process, so property developers say the current shortage could last well into next year, if not longer.
In the meantime, builders are reporting that curtain-wall prices, which have risen more than 30% in the past 18 months, are setting records.
Glass accounts for roughly one-quarter of a construction project’s budget, so the extra expense can add tens of millions of dollars to a building’s cost.
Delays are also a problem: Several towers in San Francisco’s trendy Rincon Hill neighborhood, home to some of the city’s most expensive apartments, are standing bare while their builders wait for glass.
“Nowadays, the glass guys are dictating the timetables of a project to us, instead of the other way around,” said Ralph Esposito, who oversees commercial construction by the New York office of Lend Lease Corp. , one of the country’s largest building contractors, with nearly 30 high-rise towers under way. “I don’t think people had the leap of faith that the [real-estate] industry would be as strong as the run we’re currently on.”
Producers shut 11 out of 47 float-glass manufacturing plants in North America between 2007 and 2014, according to PPG Industries Inc., a Pittsburgh-based glass maker, as demand for glass of all kind—from building facades to auto windshields—sagged during the downturn. Building a new plant can cost hundreds of millions of dollars, PPG says, and restarting an idled line can take months because workers have to jackhammer thousands of pounds of hardened glass to remove it from melting tanks.
Scott Kinter, a senior vice president in Boston with AvalonBay Communities Inc., one of the largest U.S. apartment-builders, said his team began hearing about glass-related delays about a month ago, and he expects a significant curtain-wall shortage in the fourth quarter of 2015 and into early 2016. Prices are up between 35% and 45% from 2013, he said.
Glass manufacturers did not have a leap of faith two years ago. It's more of a leap of faith today that skyscraper, auto, and housing demand will stay intact with a recovery this long in the tooth.
Mike "Mish" Shedlock