NEW YORK, NY - A ranking of the top U.S. metropolitan areas by the dollar amount of construction starts for commercial and multifamily building shows the New York City metropolitan area leading the nation in 2015, according to Dodge Data & Analytics. A total of $34.9 billion of commercial and multifamily projects in the New York City metropolitan area reached groundbreaking during 2015, up 66% from a year ago. For the nation as a whole, commercial and multifamily building in 2015 was reported at $162.7 billion, up 8% from a year ago.
Rounding out the top five metropolitan areas in 2015 with their percentage change from 2014 were the following – Miami FL, $6.3 billion, down 8%; Dallas-Ft. Worth TX, $6.0 billion, up 35%; Chicago IL, $5.9 billion, up 14%; and Washington DC, $5.9 billion, down 4%. Metropolitan areas ranked 6 through 10 were – Los Angeles CA, $5.8 billion, up 10%: Boston MA, $4.7 billion, no change from the prior year; Seattle WA, $4.2 billion, up 3%; Houston TX, $4.0 billion, down 28%; and Denver CO, $3.0 billion, up 19%.
The commercial and multifamily total is comprised of office buildings, stores, hotels, warehouses, garages and service stations, and multifamily housing. At the national level, the 8% gain for the commercial and multifamily total in 2015 was the result of commercial building holding steady with its improved 2014 amount while multifamily housing advanced 18%. In 2014, the commercial and multifamily total had jumped 26%, with sharp increases reported for both commercial building, up 22%; and multifamily housing, up 32%.
"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," stated Robert A. Murray, chief economist for Dodge Data & Analytics. "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. In comparison to commercial building, the upward progression by multifamily housing has been steadier, with 2015 marking the sixth straight year of double-digit growth, helped in particular by yet another substantial increase reported for the New York City metropolitan area. What stands out about the New York City metropolitan area in 2015 are the strong construction start gains for both commercial building and multifamily housing."
The 66% increase reported in the New York City metropolitan area in 2015 was the result of a 95% hike for commercial building combined with a 52% jump for multifamily housing. Large commercial building projects that reached the construction start stage in 2015 were the $2.5 billion 30 Hudson Yards office/retail building, the $1.2 billion 1 Manhattan West office/retail building, and the $840 million 55 Hudson Yards officer tower. In 2015, there were 43 multifamily projects valued at $100 million or more that reached groundbreaking, led by the $600 million 1800 Park Avenue apartment building, the $587 million 400 W. 61st St. apartment building, the $575 million 15 Hudson Yards apartment building, and the $500 million addition to the Flushing Commons project (phase 1). The dollar amount of multifamily projects in the New York City metropolitan area comprised a substantial 27% of the national multifamily total in 2015, up from 21% in 2014 and 16% during the 2010-2013 period. Murray noted, "The multifamily market in New York City has been lifted for several years now by increased demand from foreign investors, and 2015 saw an additional push in the year's first half as developers worked to get projects started prior to the June 15 expiration of tax incentives for multifamily projects under the 421-a program. That program was subsequently extended through January 15, 2016, and a new program was set up to cover 2016 through June 2019 with this important provision – multifamily developers and construction labor unions need to reach an agreement on the prevailing wages of construction workers performing work on 421-a projects."
The Miami FL metropolitan area in 2015 showed construction starts settling back 8%, with moderate reductions for both commercial building, down 11%; and multifamily housing, down 6%. In 2014, the Miami FL market had surged 92%, with commercial building up 51% and multifamily housing soaring 121%. Large commercial building projects that reached the construction start stage in 2015 were led by the $130 million American Express regional office building and the $43 million Flagler Station III warehouse building. There were 11 multifamily projects valued at $100 million or more that reached groundbreaking in 2015, including the $357 million Aria on the Bay condominium building, the $230 million One Paraiso condominium building, and the $215 million Paraiso Bayviews condominium building. The dollar amount of multifamily projects in the Miami FL metropolitan area in 2015 comprised 5% of the national multifamily total, compared to 7% in 2014.
The Dallas-Ft. Worth TX metropolitan area, rising 35% in 2015, registered growth for both commercial building, up 44%; and multifamily housing, up 21%. The major commercial building projects reported as construction starts included the $570 million Facebook data center (phase 1), the $260 million Liberty Mutual Insurance Claims Service Center Campus, and the $120 million Shops at Clearfork retail complex. Large multifamily projects included the $170 million Victory Place apartment building, the $150 million Ascent apartment building, and the $110 million Bleu Ciel at Harwood Village condominium tower.
The 14% increase reported for the Chicago IL metropolitan area in 2015 was the result of similar gains for commercial building, up 13%; and multifamily housing, up 17%. Large commercial building projects that reached groundbreaking in 2015 included the $500 million North Riverside office tower, the $400 million consolidated rental car facility at O'Hare International Airport, and the $350 million McCormick Place Marriott Marquis Hotel. The major multifamily projects were led by the $275 million No. 9 Walton condominium building, the $130 million 1001 South State St. apartment building, and the $128 million 833 North Clark Street apartment building.
The Washington DC metropolitan area, slipping 4% in 2015, witnessed a 9% reduction for commercial building while multifamily housing edged up 1% from the previous year. The commercial decline was due mainly to a decreased amount for the hotel category, which was lifted in 2014 by such projects as the $200 million Trump International Hotel (the conversion of the Old Post Office Building) and the $140 million hotel portion of the $925 million National Harbor MGM Casino Resort. Large commercial building projects entered as construction starts in 2015 included the $280 million Capital One Bank headquarters building, the $128 million addition to the Alexander Court office building, and the $80 million renovation to the Health and Human Services office building. Large multifamily projects that reached the construction start stage in 2015 included the $187 million multifamily portion of the $250 million Reston Town Center Mixed Use Block 4, the $174 million Apollo H Street apartment building, and the $101 million multifamily portion of the $185 million New Carrollton Station mixed use development.