A new report by Dodge Data & Analytics shows that commercial and multifamily construction starts in many of the leading U.S. metropolitan areas dropped in 2017 compared the year before.
The New York metropolitan area in 2017 registered a 16% slide for commercial and multifamily construction starts, which followed a 14% drop in 2016. The 2017 dollar amount at $25.2 billion was still 17% above the $21.6 billion reported for 2014.
The New York metropolitan area had reached a peak in 2015, reflecting the robust volume of multifamily projects making it to the construction start stage that year, as developers pushed projects forward in anticipation of the expiration of the 421-a program.
Multifamily housing in 2016 plunged 27%, but then showed only a 4% decline in 2017 as activity seemed to be stabilizing as a replacement for the 421-a program went into effect. In 2017, there were 25 multifamily projects that reached groundbreaking valued at $100 million or more, led by two projects in lower Manhattan valued at $450 million and $445 million respectively, and the $410 million Brooklyn Point high-rise in Brooklyn.
The commercial building sector experienced a steep 28% decline in 2017, following gains of 96% in 2015 and 5% in 2016.
Office construction in 2016 had been lifted by groundbreaking for such projects as the $2.0 billion 3 Hudson Boulevard and the $1.5 billion One Vanderbilt Tower, and with one exception the major office building projects in 2017 were smaller in scale, contributing to a 33% decline for this project type.
The largest office building project that reached groundbreaking in 2017 was the $1.7 billion 50 Hudson Yards, followed by a $355 million office building in Brooklyn, the $300 million office portion of the $1.6 billion Farley Train Hall redevelopment in Manhattan, and the $300 million LG corporate headquarters in Englewood Cliffs NJ.