Magazine article Mortgage Banking

Reis: Construction Is Escalating-Quietly

Magazine article Mortgage Banking

Reis: Construction Is Escalating-Quietly

Article excerpt

While multifamily construction receives the most attention, other major sectors have also seen a quiet increase in construction, reported Reis Inc., New York.

"Admittedly, this is predominantly due to office, but that sector was always likely to recover before retail and can be taken as a heartening sign that construction is ramping up, even if the pace of change is slow," said Reis Senior Economist and Director of Research Ryan Severino. "With another small step forward, [office] construction volume is increasing, even if many are not noticing."

Severino said the impending "tsunami" of new-apartment supply that many anticipate has not yet arrived. "However, it lurks just over the horizon," he said. Just over 46,000 new units delivered in the second quarter, almost identical to 2014's final quarter. "However, year-to-date, construction totaled almost 80,000 units--the highest figure since before the recession," said Severino.

Meanwhile, the office sector's fits-and-starts recovery continues. "Every so often there is an increase in construction, and then levels fall back the subsequent quarter or two," Severino said. "While it can be difficult to separate the signal from the noise, this pattern has masked an increase in construction activity in the office sector that is noteworthy, if not spectacular." Year-to-date, more than 14.1 million square feet of office space delivered--the highest midyear figure since 2010, when projects that started before the downturn were still being completed. …

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