Multifamily Construction Starts Reveal Mixed Pattern In Top Metros

Error message

  • Notice: Undefined index: taxonomy_term in similarterms_taxonomy_node_get_terms() (line 518 of /home/rentalho/public_html/sites/all/modules/similarterms/similarterms.module).
  • Notice: Undefined index: taxonomy_term in similarterms_taxonomy_node_get_terms() (line 518 of /home/rentalho/public_html/sites/all/modules/similarterms/similarterms.module).
  • Notice: Undefined offset: 0 in similarterms_list() (line 221 of /home/rentalho/public_html/sites/all/modules/similarterms/similarterms.module).
  • Notice: Undefined offset: 1 in similarterms_list() (line 222 of /home/rentalho/public_html/sites/all/modules/similarterms/similarterms.module).
The Editors's picture
Multifamily Construction Starts Reveal Mixed Pattern In Top Metros

 During the first half of 2017, eight of the top ten metropolitan markets for commercial and multifamily construction starts ranked by dollar volume registered decreased activity compared to a year ago, according to Dodge Data & Analytics.

 At the same time, metropolitan markets ranked 11 through 20 showed growth for nine of the ten markets, as smaller geographic areas are picking up the slack from the deceleration underway in those cities that have led the commercial and multifamily upturn over the past several years.

 At the national level, the volume of commercial and multifamily construction starts during the first half of 2017 was $87.5 billion, down 9% from last year’s first half, although still a slight 1% above what was reported during the first half of 2015.

The top 10 metros

The New York NY metropolitan area, at $10.5 billion in the first half of 2017, maintained its number one ranking and comprised 12% of the U.S. commercial and multifamily total, but was down 22% from a year ago. Other metropolitan areas in the top ten with double-digit declines in the first half of 2017 were:

  • Los Angeles CA ($4.4 billion), down 15%
  • Dallas-Ft. Worth TX ($3.2 billion), down 29%
  • Boston MA ($2.4 billion), down 27%
  • Seattle WA ($1.9 billion), down 23%.
  • Miami FL ($3.6 billion) dropped a moderate 5% during the first half of 2017
  • Chicago IL ($3.8 billion), down 1%
  • Washington DC ($3.6 billion), down 1%.

The two metropolitan areas in the top ten that showed growth during the first half of 2017 were:

  • San Francisco CA ($4.5 billion), up 48%;
  • Atlanta GA ($3.4 billion), up 19%.

 San Francisco was lifted by the start of the $1.3 billion Oceanwide Center Tower, while Atlanta benefitted from the start of the $240 million Coda Building in Georgia Tech’s Technology Square.

Denver the only decline in markets 11 through 20

For those markets ranked 11 through 20 in the first half of 2017, the only decline was reported for Denver CO ($1.8 billion), down 16% from a year ago.

The remaining nine markets, listed in order by the volume of activity, were:

  • Houston TX ($1.8 billion), up 2%
  • Philadelphia PA ($1.7 billion), up 23%
  • San Jose CA ($1.6 billion), up 49%
  • Austin TX ($1.5 billion), up 14%
  • Baltimore MD ($1.4 billion), up 46%
  • Charlotte NC ($1.4 billion), up 58%
  • Orlando FL ($1.4 billion), up 28%
  • Sacramento CA ($1.1 billion), up 659%
  • San Antonio TX ($1.0 billion), up 5%.

The huge percentage increase for Sacramento reflected the start of the $600 million McClellan Business Park Data Center as well as the comparison to a particularly low amount during the first half of 2016 (when Sacramento ranked 81 of metropolitan areas by dollar volume instead of this year’s first half ranking at 19).

Multifamily construction housing dropped 18 percent

The commercial and multifamily total is comprised of office buildings, stores, hotels, warehouses, commercial garages, and multifamily housing. At the U.S. level, the 9% decline for the commercial and multifamily total during the first half of 2017 was due entirely to a slower pace for multifamily housing, which dropped 18%, while commercial building held steady with its first half 2016 amount.

 “Multifamily housing served as the leading edge of the current construction expansion, and increasingly it looks like it reached its peak in 2016,” Robert A. Murray, chief economist for Dodge Data & Analytics, said in the release.

“Much of the early multifamily growth reflected an exceptional amount of activity taking place in the New York NY metropolitan area, boosted by developers trying to get projects started prior to the expiration of the 421-a program in early 2016, as well as the lift coming from foreign investment.

 “Although it’s true that lenders are exercising greater caution towards multifamily projects, more construction is taking place in those markets which have been relative latecomers to the expansion, and this is helping to limit the extent of the multifamily slowdown now underway at the national level,” Murray said.

Los Angeles multifamily construction maintained heightened level

The Los Angeles CA metropolitan area, with a first half 2017 decline of 15% for its commercial and multifamily total, reflected a 32% slide by its commercial segment while multifamily housing maintained the heightened level reported during the first half of 2016 (which was up 59% from the first half of 2015).

Multifamily housing during the first half of 2017 featured 7 projects valued at $100 million or more, led by the $364 million Jefferson Stadium Park apartments in Anaheim and the $349 million multifamily portion of the One Beverly Hills complex.

Seattle multifamily construction drops 32%

The Seattle WA metropolitan area retreated 23% during the first half of 2017, following the steady commercial and multifamily growth reported during the 2011-2016 period, including a 23% increase for full year 2016.

 The multifamily segment dropped 32% during this year’s first half, as groundbreaking for the $152 million Nexus multifamily tower was not able to offset a more broad-based pullback for multifamily housing.

Commercial building in the first half of 2017 was down 14% from a year ago, although this year did include the start of a $228 million office high-rise in Seattle and an $80 million warehouse in Tacoma.

About Dodge Data & Analytics

Dodge Data & Analytics is North America’s leading provider of analytics and software-based workflow integration solutions for the construction industry. Building product manufacturers, architects, engineers, contractors, and service providers leverage Dodge to identify and pursue unseen growth opportunities and execute on those opportunities for enhanced business performance. Whether it’s on a local, regional or national level, Dodge makes the hidden obvious, empowering its clients to better understand their markets, uncover key relationships, size growth opportunities, and pursue those opportunities with success. The company’s construction project information is the most comprehensive and verified in the industry. Dodge is leveraging its 100-year-old legacy of continuous innovation to help the industry meet the building challenges of the future. To learn more, visit www.construction.com.

 

Rate this article: 
No votes yet