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New York Leads All Metropolitan Areas in Big Project Activity During First-Half of 2018

Aug. 24, 2018
The New York metropolitan area, at $16.1 billion during the first half of 2018, comprised 16% of the U.S. commercial and multi-family total

Dodge Data & Analytics released a mid-year 2018 construction review that offers some great insight into the current state of the construction market. Below are excerpts of that press release.

During the first half of 2018, five of the top 10 metropolitan markets for commercial and multi-family construction starts ranked by dollar volume showed increased activity compared to a year ago, according to Dodge Data & Analytics. Of the top 20 markets, 11 registered gains. At the national level, the volume of commercial and multi-family construction starts during the first half of 2018 was $101.4 billion, down 1% from last year’s first half, although still 2% above what was reported during the first half of 2016.

Dodge Data & Analytics said the New York, NY, metropolitan area, at $16.1 billion during the first half of 2018, held onto its number one ranking and comprised 16% of the U.S. commercial and multi-family total, helped by a 44% jump compared to a year ago. During the previous two years, the New York share of the U.S. total had slipped to 14% in 2016 and 13% in 2017, after seeing its share reach a peak at 19% back in 2015. Other markets in the top 10 showing growth during the first half of 2018 were Washington, DC ($5 billion), up 23%; Miami, FL ($4.9 billion), up 34%; Boston, MA ($3.7 billion), up 56%; and Seattle, WA ($3.2 billion), up 7%.

Of these markets, the top four (New York, Washington, DC, Miami, and Boston) showed renewed growth after the decreased activity reported for the full year 2017, while Seattle continued on its upward track. Metropolitan areas showing decreased activity for commercial and multi-family construction starts during the first half of 2018 were Dallas-Ft. Worth, TX ($3.4 billion), down 23%; Los Angeles, CA ($2.9 billion), down 38%; San Francisco, CA ($2.8 billion), down 38%; Chicago, IL ($2.7 billion), down 37%; and Atlanta, GA ($2.0 billion), down 43%.

For those markets ranked 11 through 20, the six that registered first half 2018 gains were Austin TX ($1.8 billion), up 15%; Kansas City, MO ($1.7 billion), up 52%; Orlando, FL ($1.6 billion), up 4%; Phoenix, AZ ($1.6 billion), up 19%; Minneapolis-St. Paul, MN ($1.3 billion), up 34%; and Portland, OR ($1.1 billion), up 15%. The four posting declines were Houston, TX ($1.9 billion), down 13%; Philadelphia, PA ($1.7 billion), down 13%; Denver, CO ($1.6 billion), down 25%; and San Jose, CA ($1.1 billion), down 37%.

The commercial and multi-family total is comprised of office buildings, stores, hotels, warehouses, commercial garages, and multi-family housing. At the U.S. level, the 1% drop for the commercial and multi-family total during the first half of 2018 reflected an 8% retreat for commercial building that was essentially balanced by an 8% increase for multi-family housing.

“Multi-family housing has proven to be surprisingly resilient so far during 2018, following its 8% decline in dollar terms at the U.S. level that was reported for the full year 2017,” said Robert Murray, chief economist for Dodge Data & Analytics, in the press release. “With apartment vacancy rates beginning to edge upward on a year-over-year basis, banks had been taking a more cautious stance towards lending for multi-family projects.

“Yet, after some loss of momentum during 2017, several factors appear to be providing near-term support for multi-family housing. The U.S. economy is currently moving at a healthy clip, with steady job growth bringing new workers into the labor force.  The demand for multi-family housing by millennials remains strong, given their desire to live in downtown areas while the increasing price of a single-family home and diminished tax benefits may be dissuading some from making the transition to single family home ownership.  As shown by this year’s surveys of bank lending officers conducted by the Federal Reserve, the extent of bank tightening for multi-family construction loans is not as widespread as a year ago.

“On a broader level for commercial building, lending standards for nonresidential building loans have eased slightly over the past two quarters,” Murray continued. “And, the rollback of some of the Dodd-Frank restraints on the banking sector may encourage mid-size banks to increase lending for commercial real estate. While the expansion for commercial building and multi-family construction starts has clearly decelerated, the near-term shift appears to be one towards a plateau as opposed to a decline. This is consistent with the recent pattern for commercial and multi-family construction starts by major metropolitan areas, which reveals a fairly equal balance between those markets still showing gains and those markets showing decreased activity.”

— Dodge Data & Analytics Mid-Year 2018 Construction Report

Here's the full text of the report and a gallery as well: A Gallery of Greats - Some of the Biggest Construction Project Breaking Ground in First-Half 2018

For  information on  subscriptions to Dodge’s full suite of construction data, visit www.construction.com.


The Spiral office building that broke ground this year is  the latest addition to Hudson Yards, the largest private construction project in the U.S. -- Tishman Speyer / www.thespiralny.com
An Innovative Addition to the Big Apple Skyline