According to a Dodge Data & Analytics report, Chicago was ranked as one of the top metro areas for new commercial and multifamily construction in 2015, with a total dollar amount of $5.9 billion in housing starts. Chicago was ranked behind Miami (which had a total dollar amount of $6.3 billion), the Dallas-Ft. Worth area ($6 billion) and tied with Washington, D.C. ($5.9 billion), according to Dodge Data & Analytics.
For Chicago, new construction was up 14 percent, while commercial projects rose 13 percent and multifamily building jumped 17 percent.
Large commercial buildings that broke ground in 2015 included the $500 million North Riverside Tower and the $350 million McCormick Place Marriott Marquis Hotel, among others. Multifamily projects that broke ground included the $275 million No. 9 Walton condominium building, the $130 million 1001 South State St. apartment building and the $128 million 833 North Clark apartment building.
“At the national level, the construction expansion for commercial building and multifamily housing is proceeding,” said Robert A. Murray, Dodge Data & Analytics’ chief economist. “The upward movement by the commercial building sector has at times been hesitant, while multi-family housing has shown steadier growth.”
Commercial Building is Rising Steadily
Dodge Data & Analytics’ statistics show that nationwide, commercial building has been rising steadily since 2011, with gains of 22 percent in 2013 and 2014. According to the Commercial Property Executive, support for the commercial sector has come from market fundamentals, including rising rents and occupancy rates.
“In addition, the search for yield has led some real estate investors to make the shift from property ownership to property development, where higher yields are possible, given the fact that property values in many markets have already risen sharply,” Murray said.
Dodge Data & Analytics is predicting that commercial building and multifamily housing combined will increase eight percent in dollar volume at the national level in 2016. Additionally, Dodge Data & Analytics is predicting that commercial building will increase 10 percent, and multifamily housing will rise 6 percent.