Commercial and Multifamily Construction Starts Dominated in These Markets

The value of commercial and multifamily construction starts in the top 20 metropolitan areas of the U.S. increased 18% from 2020 to 2021, according to Dodge Construction Network. 

This recovery performance followed stalled projects and growing uncertainties that plagued the industry in 2020. Commercial and multifamily construction starts, however, remain below 2019 levels.

Only four leading markets saw declines in 2021: Washington, D.C.; Los Angeles; Nashville; and Chicago.

Nationally, commercial and multifamily construction starts increased 16% in 2021. In the leading half (the top 10 metro areas), commercial and multifamily starts rose 18% in 2021, with two metro areas, Washington, D.C., and Los Angeles, posting a decline. 

In the lesser half of metro areas (those ranked 11 through 20), commercial and multifamily starts rose 17% in 2021, with only Chicago and Nashville losing ground from 2020.

In the top 20 metro areas of 2021, commercial and multifamily starts were 5% below the level recorded in 2019, and national commercial and multifamily starts were 2% below the 2019 level. In the top 10 metro areas, commercial and multifamily starts were 9% below their 2019 levels, while starts in the metro areas ranked 11-20 were up 5% from 2019. This reveals that in 2021, smaller, less dense metropolitan areas are becoming increasingly popular.

New York, Dallas, Miami Lead the Way

The New York metropolitan area was the top market for commercial and multifamily starts in 2021 at $26.8 billion, an increase of 14% from 2020. 

The Dallas metropolitan area was in second place, totaling $10.7 billion for the year, an impressive 45% gain over 2020. The Miami metro area was ranked third in 2021, with commercial and multifamily starts totaling $8.4 billion, a dramatic 65% increase over 2020.

The remaining top 10 metropolitan areas through the first half of 2021 were:

Washington, DC, down 9% ($8.4 billion)

Boston up 16% ($7.3 billion)

Los Angeles down 12% ($7.1 billion)

Atlanta up 49% ($6.6 billion)

Seattle up 48% ($6.2 billion)

Phoenix up 11% ($6.0 billion)

Houston up 5% ($5.5 billion).

The second-largest metro group included:

Philadelphia up 30% ($5.5 billion)

Austin up 9% ($5.4 billion)

Chicago down 31% ($4.9 billion)

Orlando up 40% ($4.3 billion)

Denver up 21% ($4.3 billion)

Minneapolis up 60% ($4.1 billion)

San Diego up 93% ($3.9 billion)

San Francisco up 22% ($3.7 billion)

Nashville down 8% ($3.7 billion)

Riverside up 41% ($3.1 billion)

In 2021, total U.S. commercial and multifamily building starts rose 16% to $236.6 billion from 2020. Nationally, commercial starts were up 8% to $120.3 billion, while multifamily starts were 25% higher at $116.4 billion. 

Within the top 10 metro areas, commercial building starts rose 11% to $45.1 billion in 2021, while multifamily starts gained 25% to $48 billion. Within the second largest group of metropolitan areas, commercial building starts declined 4% in 2021, while multifamily starts improved 42% from 2020.