Commercial, multifamily construction starts rise 11% YOY in top 20 metros: Dodge | Dump Trucks Charlotte NC
Dump Trucks Columbus OH Insight:
While the value of multifamily starts declined overall, some of the top markets have been holding fairly steady and even saw starts increase last year. In fact, multifamily was the main driver of construction activity in York City last year, increasing 9% from the year before. Washington, D.C., experienced a 1% decline in the value of multifamily starts but fared well given the national decline of 5%.
When compared to the decrease in multifamily starts in other major metros like Los Angeles (-14%), Boston (-36%), Miami (-11%), Dallas (-25%) and Atlanta (-13%), The New York City and Washington, D.C. metros are downright hot.
So what keeps the multifamily markets in these cities thriving?
"I think people are so spoiled at the minute that nobody wants to commute," said Paraic Morrissey, resident manager in real estate firm Rider Levett Bucknall's (RLB) New York City office. Some new corporate entrants into the city, he said, are even eschewing more traditional business areas like Midtown so that they can be closer to the residential areas in which their employees live.
All of the new commercial building activity, like Manhattan's $25 billion Hudson Yards development and the $3 billion One Vanderbilt project, are driving employment, he said, and transportation improvements like the Second Avenue subway are making everything in the city more accessible. These factors, Morrissey said, are making living in the city more attractive, thus the strong multifamily sector.
Any downward movement in multifamily in this major market, he said, will be more about right-sizing than about a downturn.
The hassle of commuting in and out of D.C., said Kirk Miller, resident manager in RLB's Washington D.C. office, is creating opportunities in the multifamily market there as well. "With the commute getting to be so congested," he said, "housing within the D.C. area is increasing. They want to be able to get to columbus oh dump truck company in 30 minutes."
No market is recession-proof, he said, but as long as Washington, D.C., is home to so many government agencies, private industry and other employers attracted to the nation's capital, Miller doesn't see the multifamily market there slowing down, especially next to Metro stops as the District is always expanding in that area, again, increasing accessibility to the city and making the daily commute easier.
"It may slow down a bit," Miller said, "but right now D.C. is going crazy."
Second-tier metros — those ranked 11 to 20 — are also doing well, the study found, outperforming the U.S. in general with a 17% increase from the year before. The ones posting gains were:
- Philadelphia up less than one percent ($4.5 billion)
- Phoenix up 42% ($4.1 billion)
- Nashville up 90% ($3.8 billion)
- Orlando, Florida, up 42% ($3.7billion)
- Minneapolis up 11% ($3.5 billion)
- Portland, Oregon, up 80% ($3.4 billion)
- Columbus, Ohio, up 57% ($2.9 billion)
- Tampa up 83% ($2.8 billion)