NEW YORK CITY — New construction starts increased 8 percent across the U.S. commercial real estate industry in 2015 with the multifamily sector leading the way, according to a report by New York-based data firm Dodge Data & Analytics.
The national total was $162.7 billion in new starts for the office, retail, hotel, warehouse, garage and multifamily sectors, up from $150.3 billion in 2014. Most property sectors “held steady,” according to the report, while multifamily’s 18 percent spike caused the bulk of the increase.
Click to see the top 20 MSAs for new construction starts in 2015.
By location, the New York City metropolitan statistical area (MSA) led the way with a striking 66 percent increase in construction starts over 2014, representing $34.9 billion in new construction starts in 2015.
Other MSAs in the top five for total volume were Miami ($6.3 billion), down 8 percent; Dallas-Ft. Worth ($6 billion), up 35 percent; Chicago ($5.9 billion), up 14 percent; and Washington D.C. ($5.9 billion), down 4 percent.
The largest percentage increase after New York was Kansas City, which jumped to 18th place thanks to a 56 percent spike in new starts to $1.8 billion.
Among the top 20 metros by construction starts, Philadelphia saw the greatest drop in production — a 57 percent reduction in new starts and a total of $1.9 billion. The Houston area saw a 28 percent drop in new starts, but was still the ninth-largest MSA with nearly $4 billion in construction starts in 2015.
“The construction start statistics do show some deceleration for the commercial building sector at the national level during 2015, after the substantial gain witnessed during 2014,” says Robert Murray, chief economist for Dodge.
“The recovery for commercial building has so far been hesitant, with periods of increased activity often followed by a pause. On the plus side, factors such as generally rising employment and declining vacancy rates should encourage further growth for offices, hotels, and warehouses, while store construction remains more problematic given the shifting retail landscape.”
This was the sixth straight year of double-digit percentage growth for the multifamily sector, Murray goes on to note.
Click here to read the full report.
— Jeff Shaw