The COVID-19 pandemic hindered commercial and multifamily construction activity in 2020, according to Dodge Data & Analytics’ recent year-end report. The value of commercial and multifamily construction starts for the top 20 metros lost 23% last year, falling to $111.1 billion.
Nationally, commercial and multifamily starts dropped 20% year over year to $193.4 billion. Breaking it down, multifamily building starts fell 11% to $89.5 billion, and commercial building starts dropped 26% to $104 billion.
The commercial and multifamily total consists of office buildings, stores, hotels, warehouses, commercial garages, and multifamily housing. Not included are institutional building projects, manufacturing buildings, single-family-housing, public works, and utility plants.
“The pandemic is having a significant negative impact on commercial and multifamily construction across the country,” said Richard Branch, chief economist for Dodge Data & Analytics. “While some areas stabilized over the summer, the current wave of the virus has further hindered activity. The recently passed $900 billion stimulus plan will go a long way toward reenergizing the economy.”
He added that while the construction sector will show signs of recovery this year, the full road back will be “long and difficult.”
In the top 10 metros, commercial and multifamily construction starts dropped 23% during 2020 with only one metro area—Phoenix—seeing an increase. Within the top 10 metros, multifamily building activity fell 21%, while commercial building starts dropped 26%. For the second group of top metros (those ranked 11 through 20), commercial and multifamily construction starts also fell 23%, with only Denver and Kansas City, Missouri, posting increases for 2020. Within this group of metros, multifamily building activity fell 15% and commercial building starts decreased 30%.
Some key multifamily stats from Dodge Data & Analytics for the top 10 metros include:
- New York: Multifamily construction starts, which have been robust over the past several years, saw a significant 27% decrease in 2020. The largest multifamily building to break ground was the $500 million Bankside mixed-use development in the Bronx.
- Washington, D.C.: Multifamily building starts in the metro saw a 2% increase last year. The largest multifamily development underway was the $200 million 300 M NE Street mixed-use project.
- Los Angeles: Multifamily building starts fell 2% last year, with the $275 million Figueroa Center mixed-use project, $200 million 8th and Figueroa mixed-use project, and the $167 million AVA Arts District Live/Work Complex as the largest developments starting construction.
- Dallas: Multifamily building starts fell 15% in 2020. The largest multifamily building underway was the Novel Turtle Creek residential tower.
- Chicago: Multifamily building starts in the Windy City saw a significant decline, falling 54%. The largest multifamily building to break ground was the $252 million mixed-use project at 300 N. Michigan Ave.
- Boston: Multifamily building starts dropped 21% last year. The largest building to start construction was the $154 million Wheeler Street building in Cambridge.
- Phoenix: This market has been a multifamily darling, seeing a 52% increase in multifamily building starts in 2020. The largest projects starting construction were the $300 million Pier 202 mixed-use development in Tempe, the $125 million Adeline Residences in downtown Phoenix, and the $100 million Scottsdale Entrada mixed-use development in Scottsdale.
- Miami: Multifamily building starts fell 31% in 2020, and the metro’s largest multifamily building projects to break ground included the $249 million Downtown 5th Luxury Apartments, the $115 million Miami Urban Village Apartments in Homestead, and the $100 million SLS Resort Residences in Hallandale Beach.
- Austin: Multifamily building starts increased 4% last year. The largest multifamily buildings underway are the $150 million 44 East Condo Tower, the $120 million Hanover Republic Square Apartments, and the $100 million Greystar Menchaca Road Apartments.
- Houston: Multifamily building starts decreased 48% in 2020. The largest multifamily construction starts include the $217 million Hanover Square & Bayou Apartments, the $200 million High Street Residential Apartments, and the $70 million Boone Manor Apartments.
