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AECOM Joins the Gramercy District Project as Contractor

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AECOM (ACM - Free Report) recently announced that its Tishman Construction unit has become a joint general contractor of Phase 1A of Gramercy District. This unit will be one of the two general contractors in the project, TRINITY Group Construction being the other. Work on this project is expected to commence from 2017 and be completed by late 2018.

Spreading over 2.5 million square foot, Gramercy District is a technology-focused mixed-use development in Loudoun County, VA. Global private equity firm 22 Capital Partners is the lead investor and master developer of the project. This is the first smart city of the country aiming at effortless integration of technology and real estate infrastructure from the very onset of construction.

The project aims to develop a highly efficient, sustainable and economically viable ‘Smart City In-a-Box’ that can serve as the role model of upcoming future projects. Phase 1A of the project entails development of a 268-unit, seven-story luxury apartment building, 26,000 square feet retail area, rooftop amenities and five stories parking space. Sustainable land use and community transformation are other major programs under this project.

Development of smart cities has gained pace in the contemporary digital age. AECOM believes it is well-equipped to make the most of this industry uptrend.. Tishman Construction has been a key growth driver for the company, clinching major deals including One Vanderbilt in Manhattan area and Brookfield’s One Manhattan West, situated in New York City.

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AECOM’s diversified portfolio comprises both designing and construction services. In addition, the company’s business is spread across a number of vital markets that mitigate operating risks. The Design and Consulting Services segment is currently bolstering the company’s growth. The recently passed five-year transportation bill – known as the FAST Act – has improved the company’s visibility. It now expects this bill to fuel $60 billion worth of projects, going forward.

During the third-quarter of fiscal 2016, this bill has contributed to a 12% increase in backlog on a year-over-year basis. As a matter of fact, organic revenue growth accelerated by 14% in third-quarter fiscal 2016 in building construction business, mirroring the company’s underlying strength. We believe positive industry trends, along with the company’s dominant position in each market, bode well for long-term growth.

AECOM currently holds Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Willdan Group, Inc. WLDN, A. O. Smith Corp. AOS and EnerSys ENS. All three stocks carry a Zacks Rank #2 (Buy).

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