HAMILTON, N.J. —The value of commercial and multifamily construction starts in 2020 tumbled 20 percent to end the year at $193.4 billion, according to Dodge Data & Analytics. Within the top 20 metropolitan areas that the Hamilton-based research firm tracks, the fall was more severe as that group’s starts fell by 23 percent in value, or $111.1 billion.
Overall, commercial real estate starts fell 26 percent in value to $104 billion, while multifamily building activity slid by 11 percent to $89.5 billion.
Richard Branch, chief economist for Dodge Data, says that the COVID-19 pandemic had a significant negative impact on commercial and multifamily construction across the country with only a few markets seeing year-over-year increases in construction starts compared to 2019.
“The construction sector will show signs of recovery in 2021, but, the road back to full recovery will be long and difficult. The effects of the pandemic on the U.S. economy and building markets will be felt for several years,” says Branch. “While some areas stabilized over the summer, the current wave of the virus has further hindered activity.”
Only one metro area in Dodge Data’s top 10, Phoenix, reported a year-over increase in construction starts. The No. 7 market for 2020 construction starts saw a 32 percent uptick from 2019.
Denver and Kansas City, which rank Nos. 15 and 17 on the list, respectively, also saw a year-over-year increase.
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The New York metropolitan area continued to be the largest market for commercial and multifamily starts at $23.5 billion but suffered a stark 25 percent decline from 2019. The Washington, D.C. metro area managed to maintain its second place standing despite an identical decline in 2020 lowering commercial and multifamily starts to $8.9 billion.
The Los Angeles metro area, which fell 21 percent to $7.4 billion, ranked No. 3. The remaining top 10 metropolitan areas in 2020 were:
• Dallas (down 20 percent at $6.8 billion)
• Chicago (down 9 percent at $6.4 billion)
• Boston (down 27 percent at $6.3 billion)
• Phoenix (up 32 percent at $5.3 billion)
• Miami (down 37 percent at $5.1 billion)
• Austin (down 17 percent at $4.9 billion) and
• Houston (down 47 percent at $4.5 billion)
Dodge Data’s top 10 metropolitan areas accounted for 41 percent of all U.S. commercial and multifamily construction starts in 2020, down from a 43 percent share in 2019.
Dodge Data & Analytics’ report tracks the starts of office buildings, stores, hotels, warehouses, commercial garages and multifamily housing. Not included in this ranking are institutional building projects such as educational facilities, hospitals, convention centers, casinos and transportation terminals. Also not included are manufacturing buildings, single-family housing, public works, and electric utilities/gas plants.
— John Nelson