Skanska USA quit as construction manager for Forest City Ratner Cos. prefabricated apartment tower development in Brooklyn, New York, after disputes between the two sides over the projects design and costs.

Skanska terminated its contract because of material breaches by Forest City Ratner, the Stockholm-based company said in an e-mailed statement. The Atlantic Yards project, called B2, has been stalled since late last month.

Today is an incredibly disappointing day, Richard Kennedy, co-chief operating officer of Skanska USA Building, said in the statement. While the B2 project certainly has its issues, we were hopeful that our client and partner would address them so we could move forward with building much-needed affordable housing in Brooklyn.

The 34-story, 363-unit apartment tower would be the worlds tallest modular building. Forest City Ratner executives have said that building pre-fabricated units of the tower off-site and then piecing them together, was a technology that would save time, money and reduce construction traffic.

The companies have traded lawsuits in New York State Supreme Court blaming the other for delays, design flaws and cost increases.

Forest City Ratner, in its own statement today, said Skanska blindsided us when it stopped construction, and has been unresponsive to its efforts to resolve their differences.

Skanska is making clear again that they have no intention of moving this project forward. MaryAnne Gilmartin, chief executive officer of New York-based Forest City Ratner, said in an e-mailed statement. We believe in modular and have worked tirelessly to get B2 back on track.

Forest City is the initial developer of the $4.9 billion Atlantic Yards project, which includes the Barclays Center arena, home of the National Basketball Associations Brooklyn Nets since 2012. The 22-acre (9-hectare) development, which has been renamed Pacific Park, is to include 14 apartment buildings.

To contact the reporter on this story: David M. Levitt in New York at dlevitt@bloomberg.net

To contact the editors responsible for this story: Kara Wetzel at kwetzel@bloomberg.net Andrew Dunn

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Skanska Quits Brooklyn Prefabricated Apartment Project

The construction company building the prefabricated apartment building next to the Barclays Center in Brooklyn has terminated its contract with the developer, Forest City Ratner.

We could not continue to incur millions of dollars in extra costs with little hope that Forest City would take responsibility for fixing the significant commercial and design issues on the project, said Richard Kennedy, co-chief operating officer at Skanska USA Building, in a statement.

Skanska stopped work on the 34-story residential high rise project in August, after citing design flaws and cost overruns. It also filed suit against a company owned byForest City Ratner.

In turn, the developer filed suit against Skanska.

Skanskas decision came as a judge ordered the construction company to restart the process for settling disputes as described in the contract. The judge denied a request from Forest City to reopen the modular factory located in the Brooklyn Navy Yard.

MaryAnne Gilmartin, president and CEO of Forest City Ratner, criticized Skanska, describing the companys actions as deplorable and disappointing and resultingin 157 peoplebeing put out of work. The tower at Atlantic Yards, now branded as Pacific Park, was to be completed by July 2014.

We will continue to rigorously pursue our options through the courts to get B2 built, Gilmartin said in a statement.

The $117 million contract called for Skanska to build 930 modular units, 50 percent of which were to be affordable housing.

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What Will Happen to the Barclay's Apartments?

Seattles hot job scene continues to push up apartment rents, although a building boom may soften the market next year, according to two new reports.

Average rent is now $1,338 in King County, up 5.4 percent both from six months ago and 9 percent from a year earlier, Dupre + Scott Apartment Advisors reported Monday.

Tom Cain, of Apartment Insights, reported that rents in King and Snohomish counties rose 2.5 percent in the third quarter and 8.1 percent over the past year.

The rent increases includes many new apartments, which tend to rent for more, Dupre + Scott principal Patty Dupre noted in the report. Take out new apartments, and the region-wide rent increase falls from 4.7 percent to 3.9 percent since March, and from 8.2 percent to 6.3 percent over the past year.

Because of up and down cycles, rents have gone up by an average of just 3.4% a year since 1997, Dupre said. The increases weve seen lately arent unusual when the economy is strong. But they happen less often than investors think, and they barely make up for the downturns.

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Seattle rents rise as apartment construction booms

GLEN ELLYN Wheaton-based developers with a conceptual plan to construct a multi-purpose building at the site of McChesney and Miller received feedback from the Village Board at a workshop meeting Monday.

Next Generation Development LLC, the company planning the project, presented the details to the board. Nothing has yet been finalized.

Proposed is the construction of a six-story building that would occupy the McChesney and Miller property, the Crescent/Glenwood parking lot to the south and a portion of Crescent Boulevard.

If the project moves forward, a full traffic study evaluating the effects of the road closure and resulting traffic distribution would be requested.

A portion of the first floor totaling 3,774 square feet would be set aside for retail space. The rest of the first floor would be used for parking. Floors two through six would be residential, with an expected 180 units, according to Next Generation CEO James Hughes.

Hughes said there would be 24 studio apartments, 110 one-bedroom apartments and 42 two-bedroom apartments. The rent would range from $1,210 to $2,235.

The complex would feature a rooftop pool, lounge, 24-hour fitness center, business center, energy-efficient appliances and security cameras, among other things.

There would be at least two floors of parking: One at ground level and one at basement level. Alternative plans include a second basement level of parking.

Without the second basement parking level, the village would lose 12 public parking spaces to the project. Adding a second level increases the number of spaces to 156.

Glen Ellyn Historic Preservation Commission member Lee Marks warned the developers about constructing something that would clash with the downtown historic district.

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Developer talks 6-story apartment building, $7M in incentives for McChesney and Miller site

don smith/staff photographer

Construction on Park Avenue in Fort Lee. The Modern is the glass project; the other, in its early stages on the adjoining block, is Hudson Lights.

This week The Modern, a luxury high-rise apartment building perched near the George Washington Bridge in Fort Lee, is opening its leasing office. More than 2,000 potential tenants have already registered for notices regarding rental opportunities at the 47-story building.

The project's developer, SJP Residential Properties, put a banner up on the 450-unit property about five weeks ago, which drew the "unprecedented" response, said the company's president, Allen Goldman.

"We view the Bergen County market as having been underserved significantly," he said. "Look at Fort Lee and Hackensack. What is the housing stock? It's decades old."

The multifamily residential rental market is one of the hottest commercial real estate segments in North Jersey, with a swell of development planned and existing properties fetching top prices. In New Jersey, the multifamily market has accounted for a record 63 percent of the permits issued so far this year. Led by this rebound in multifamily activity, the state's builders are on track to start the largest number of homes since 2006, before the recession.

North Jersey has dominated the state's home construction market, with about 30 percent of building permits this year in Bergen and Hudson counties.

But some developers and housing experts are wondering when, and where, the bubble will burst.

"Any market that gets super hot eventually has got to cool off," said William Procida, founder and president of Procida Funding & Advisors LLC in Englewood Cliffs. "Construction costs being what they are now make it very difficult to make a multifamily ground-up construction even work anymore, and rents aren't spiking with them."

On the Hudson River's Gold Coast, which spans Jersey City to Fort Lee, 16,540 residential units are either under construction, proposed or in the planning stages, according to Cushman & Wakefield of New Jersey Inc. There are about 6,000 residential units set for Bergen County, according to Cushman's data.

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Some experts fear end of rental market boom

The apartment and commercial building construction in the city is entering a new era, where high-rise buildings will be the in-thing. Keeping it in mind, the builders in the city need to be educated about the safety and quality norms, said P. Anand Kumar, Chairman of Visakha Apartment Builders Association (VABA). He was addressing the media before the start of the one-day seminar on Structural reinforcement detailing and construction material here on Sunday.

He pointed out that VABA was formed a year ago with the intention of creating awareness on various aspects among the builders and taking up issues with the authorities concerned. This seminar attempts not only to educate the builders but also the ground staff such as masons, supervisors and rod-benders on safety and quality aspects, he said.

Referring to a question on the recent accident where four workers were buried alive after earth caved in at a construction site, VABA president P. Bhogeswara Rao said, That is what we intend to point out and educate people. It was clear that certain safety norms were not followed and since we are entering a new phase, we need to give close attention to such aspects. We are all new to high-rise construction, and there is a lot to learn. We intend to educate our fraternity, including the support staff by hosting such seminars and training programmes on a regular basis, he said.

Referring to the accident, association secretary P.V.L. Narasimha Raju said that testing of soil plays a vital role in high-rise construction, especially when one intends to go for sub-soil construction. There is a scientific approach, and many are not aware of them. And that is why we have invited experts from IIT-Madras to visit us on a regular basis and educate us on such aspects, said Mr. Raju.

On whether errant builders will be blacklisted, Mr. Raju said that the association was not a statutory body to do so, but would definitely cancel such builders membership and withdraw all support.

Two senior professors from the Department of Civil Engineering, Andhra University -- K. Rambabu and K. Srinivasa -- addressed the participants.

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City builders to focus more on safety

WASHINGTON -- U.S. home construction plunged in August, led by steep decline in the volatile apartment category. But single-family house construction, a larger and more stable portion of the market, fell only modestly.

Construction fell 14.4 percent in August to a seasonally adjusted annual rate of 956,000 homes, the Commerce Department said Thursday. This reverses the sharp gains in July when the rate of new construction rose to 1.12 million homes, the highest annual rate since 2007.

Last month's decrease primarily came from builders starting fewer apartment complexes, which plummeted 31.5 percent compared to July. Apartments have propelled much of the growth in residential construction over the past year, but the pace has been volatile from month to month. Apartment starts surged 51 percent in July.

In August, the building of single-family houses fell 2.4 percent.

Applications for building permits, a sign of future activity, dipped 5.6 percent to an annual rate of 998,000.

Apartment construction has surged 19.2 percent in the past 12 months. Meanwhile, single-family starts have risen just 4.2 percent. The shift among builders to increased apartment building is a sign that a rising share of Americans will be renters, rather than homeowners.

Jed Kolko, chief economist at the real estate firm Trulia, said that builders are already constructing too many single-family houses. The vacancy rate for these homes was 10.7 percent in 2013, compared to 7.4 percent in 2000, according to the Census.

"We're still building single family homes faster than we can fill them," said Kolko, saying that builders will need to place a greater emphasis on apartments.

Changes in starts for multi-unit homes such as apartments influence the monthly construction totals, but the category accounted for just 32 percent of starts in August. That's up slightly from 29 percent in August 2013.

The growing preference for rentals likely reflects the sluggish, five-year economic recovery. Most incomes remain below their pre-recession levels, making it harder for families to save for a down payment and qualify for a mortgage. The Census Bureau said this week that median household incomes were $51,939 in 2013. Adjusting for inflation, that's 8 percent lower than in 2007, when the recession began.

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Volatile apartment sector reduces U.S. home building

WASHINGTON U.S. home construction plunged in August, led by steep decline in the volatile apartment category. But single-family house construction, a larger and more stable portion of the market, fell only modestly.

Construction fell 14.4 percent in August to a seasonally adjusted annual rate of 956,000 homes, the Commerce Department said Thursday. This reverses the sharp gains in July when the rate of new construction rose to 1.12 million homes, the highest annual rate since 2007.

Last months decrease primarily came from builders starting fewer apartment complexes, which plummeted 31.5 percent compared to July. Apartments have propelled much of the growth in residential construction over the past year, but the pace has been volatile from month to month. Apartment starts surged 51 percent in July.

In August, the building of single-family houses fell 2.4 percent.

Applications for building permits, a sign of future activity, dipped 5.6 percent to an annual rate of 998,000.

In the Twin Cities area, permits for new single-family houses declined 15 percent in August from a year earlier, and permits for new multifamily units were down 78 percent. But two large apartment projects permitted in August of last year make it appear as if multifamily construction is plunging. Apartment units for the year to date are still running 8 percent ahead of the same period in 2013.

Single-family permits in the Twin Cities, however, are down 5 percent for the year to date.

Local homebuilders pulled permits for 531 new housing units in August, down from 1,173 in August 2013, according to the Keystone Report, which tracks residential permits in the 13-county area. Of the 531 new units, 394 were single-family houses and 138 were multifamily units.

Nationally, apartment construction has surged 19.2 percent in the past 12 months. Meanwhile, single-family starts have risen just 4.2 percent. The shift among builders to increased apartment building is a sign that a rising share of Americans will be renters, rather than homeowners.

Jed Kolko, chief economist at the real estate firm Trulia, said that builders are already constructing too many single-family houses. The vacancy rate for these homes was 10.7 percent in 2013, compared to 7.4 percent in 2000, according to the Census.

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Apartment-sector plunge drags down home building

WASHINGTON Home construction plummeted in August, led by steep decline in the volatile apartment category. But single-family house construction, a larger and more stable portion of the market, fell only modestly.

Construction fell 14.4 percent in August to a seasonally adjusted annual rate of 956,000 homes, the Commerce Department said on Thursday. This reverses the sharp gains in July, when the rate of new construction rose to 1.12 million homes, the highest annual rate since 2007.

Last month's decrease primarily came from builders starting fewer apartment complexes, which plummeted 31.5 percent compared to July. Apartments have propelled much of the growth in residential construction during the past year, but the pace has been volatile from month to month. Apartment starts surged 51 percent in July.

In August, the building of single-family houses fell 2.4 percent.

Applications for building permits, a sign of future activity, dipped 5.6 percent to an annual rate of 998,000.

Apartment construction has surged 19.2 percent in the past 12 months. Meanwhile, single-family starts have risen 4.2 percent. The shift among builders to increased apartment building is a sign that a rising share of Americans will be renters rather than homeowners.

Jed Kolko, chief economist at the real estate firm Trulia, said that builders are constructing too many single-family houses. The vacancy rate for these homes was 10.7 percent in 2013, compared to 7.4 percent in 2000, according to the Census.

We're still building single-family homes faster than we can fill them, said Kolko, who added that builders will need to place a greater emphasis on apartments.

Changes in starts for multi-unit homes such as apartments influence the monthly construction totals, but the category accounted for just 32 percent of starts in August. That's up slightly from 29 percent in August 2013.

The growing preference for rentals likely reflects the sluggish, five-year economic recovery. Most incomes remain below their pre-recession levels, making it harder for families to save for a down payment and qualify for a mortgage. The Census Bureau said this week that median household incomes were $51,939 in 2013. Adjusting for inflation, that's 8 percent lower than in 2007, when the recession began.

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Home construction plunges more than 14% in August

Work is scheduled to begin by the end of the year to put 87 affordable apartments in a century-old building near Union Station in downtown St. Louis.

Sherman Associates, of Minneapolis, said today the project to transform the building at 1900 Pine Streetknown as Station Plazashould be done by late next year. City records show the six-story brick building was erected in 1884.

CBRE said it represented Sherman Associates in acquiring the building from R&P Realty Inc. The deal includes the parking lot just west of the building.

Sherman Associates said it bought the property for about $1.6 million and has a construction budget of $10.5 million. The developer is expected to use low-income housing tax credits in the project.

In addition, the project is in line for tax abatement from the city. In the 1980s, the now-vacant building was renovated as offices.

Tim Bryant covers commercial real estate, development and other business stories for the Post-Dispatch. He blogs at Building Blocks, the Post-Dispatch development blog.

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Building at 1900 Pine to get apartment conversion