Jeffrey Steele, Contributing Writer
New York — The New York City metropolitan area led the nation in new commercial and multifamily construction starts during the first half of 2015. That’s the word from Dodge Data & Analytics, which reported $17.3 billion in commercial and multifamily projects broke ground in the metro in the January-to-June 2015 period, easily outdistancing the Miami area’s $3.0 billion in starts.
“The multifamily housing expansion remains in full swing, and it’s broadening in geographic scope,” Robert Murray, chief economist at Dodge Data & Analytics told MHN. “Not only New York and Miami are seeing strong growth, but healthy percentage gains are being reported in such metropolitan areas as Boston, Seattle, Denver, Chicago, and Atlanta. There are a few markets that showed earlier strength that now appear to be pulling back, such as Washington D.C. and Houston. But by and large, the upward trend for multifamily housing is still in progress.”
Looking solely at multifamily construction starts in the first half of the year, the New York City area’s multifamily starts ballooned from $6.75 billion to $11.25 billion year over year, a 67 percent surge. That compared very favorably with the Miami area, which grew from $1.36 billion to $1.93 billion, a 42 percent gain.
By contrast, the Washington, D.C. area actually declined in new multifamily building starts, dropping from $1.75 billion to $1.57 billion, a 10 percent falloff.
Rounding out the top 10 in multifamily starts in millions of dollars were, in order, the Boston, Los Angeles, Seattle, Denver, Chicago, Houston and Atlanta areas.
“Lending conditions continue to be generally favorable for multifamily projects, although it’s possible that banks will soon begin to take a harder look at potential projects in areas that have already experienced strong construction growth,” Murray said.
“The Federal Reserve’s April 2015 survey of bank lending officers did indicate that a slight four percent of respondents were beginning to tighten lending standards for multifamily projects, although the more recent July 2015 survey showed that three percent of the respondents reported easing standards. On balance, lending standards appear stable for the moment.”
Market fundamentals, such as occupancies and rents, continue to demonstrate improvement, Murray said. “That supports further growth for commercial and multifamily construction,” he added. “Multifamily housing has shown steady growth since 2010, which has generated some concern about overbuilding, particularly in the New York City metropolitan area. Still, New York City is seeing an even greater amount of multifamily construction starts this year. And the national multifamily upturn is now broadening in terms of geography, with construction gains taking place in more metropolitan areas.”
There were 24 multifamily projects valued at $100 million or greater that reached groundbreaking stage in the New York City metropolitan area during the first half of 2015, Murray said. Those projects were led by the $600 million 1800 Park Avenue apartment building, the $500 million 109 W. 57th St. apartment building, and the Phase I, $500 million addition to Flushing Commons in Queens.
Cover Image: QLIC, a 421-unit asset being built by World Wide Group adjacent to the Queensboro Plaza in Long Island City, N.Y. Photo by Mike Ratliff.
All chart data courtesy Dodge Data & Analytics.