The real estate landscape in the U.S. saw tremendous transformation over the past decade, with millions of housing units and billions of square feet of commercial space being constructed. A recent StorageCafe article analyzed new real estate development in the country’s top 50 largest metros and ranked them based on the number of permits issued for multifamily and single family housing, and the square footage of new space added in the industrial, office, self storage and retail sectors.
The Texan metro was the most active nationally for new real estate construction overall, fueled by an influx of new residents and new businesses. DFW saw over 323,000 single family units and 233,000 multifamily units given permits over the past decade, responding to strong local demand for more housing. The Dallas metro area also excels when it comes to industrial development, with no less than 228M square feet of new industrial space delivered over the past decade.
The metro area’s self storage market also experienced a decade of massive growth, having added 23M square feet of new storage space to the local inventory. With almost 55,000 people relocating to DFW from July 2020 to July 2021 alone, it’s no wonder that self storage services, often associated with moving and home improvement, are in high demand in the area. The monthly rate for a 10’x10’ self storage unit in Dallas stands at $103 currently, which represents an 8% year-over-year increase.
Texas was at the forefront of real estate development during the past decade, with the Houston metro area ranking second in the top. As one of the primary destinations of newcomers moving to Texas, particularly Californians in search of affordable housing, the Houston metro area excelled in single family construction, registering an impressive 392K permits issued for such units over the past 10 years. Over 52,000 of the building permits were registered last year alone, pointing toward further increase in activity in this sector. Office construction, underpinned by big players such as Hewlett Packard, Oracle and Maddox Defense having relocated to Houston, experienced a productive decade, during which about 153M square feet of new office space was delivered.
The New York metro area ranks third overall for new real estate development during the past decade, but it truly excels in multifamily construction. The metro area permitted over 410K multifamily units between 2012 and 2021, taking the top spot nationally for this real estate sector. Building permits for about 107K single family housing units were also issued during the same period. In addition, the New York metro area shines when it comes to office space – new construction for the past decade totaled 79M square feet, more than in any of the other metros analyzed.
The Phoenix metro area turned into a remarkable success story over the past decade, with new residents and businesses flocking there. While the new residents are attracted by the affordable living costs, the strong job market, and the relaxed and outdoorsy lifestyle, companies relocating there are interested in a friendly business environment and the well-educated workforce. With many young families taking up residence in the area, it’s not surprising that single family home construction is booming. The Phoenix metro area also saw about 207K permits for single family homes being issued during the past decade, along with over 95K for multifamily units. About 97M square feet of industrial space and 21M square feet of self storage space were added to the local inventory during the same period.
Single family home construction in the Atlanta metro area thrived over the past decade, with the pandemic years not only failing to hamper the activity but actually being the most productive ones of the decade. In total, building permits for 222K single family homes and almost 88K multifamily units were issued in the Atlanta metro area for the past decade. The metro area also added about 99M square feet of new industrial space, 20M square feet of new office space and 12M of self storage space – a remarkable feat indeed, seeing as Atlanta is one of the smallest metros in terms of population among the top 10.
The Los Angeles metro area fared a lot better for multifamily units than for single family homes – a trend that’s common with other urban hotspots with expensive real estate markets and limited building space, such as New York and San Francisco. The Los Angeles metro area registered permits for over 195K multifamily units from 2012 to 2021, the third highest nationally after the New York and Dallas metros. Permits for about 89K single family homes were issued during the same period. The LA metro area also added about 54M square feet of new industrial space and 30M square feet of office space.
The past decade saw quite a similar number of permits issued for single family and multifamily units in the Washington DC metropolitan area – 130K and 121K, respectively. Fittingly for a metro that encompasses a significant portion of the country’s administration and a busy business sector, the Washington metro area saw the addition of over 39M square feet of office space from 2012 to 2021, ranking fourth nationally for this real estate sector. The self storage industry also prospered throughout the past decade, with almost 10M square feet of new storage space added to the local inventory.
The most active real estate sectors for new construction in the Chicago metropolitan area during the past decade were industrial and self storage, which helped propel the metro area into the top 10 of the best metros for real estate development. Over 162M square feet of industrial space was built in the area during the past decade, placing Chicago third nationally for this sector. The metro area also saw the addition of 14M square feet of new storage space, helping it rank fourth among the country’s metros for self storage. In terms of new housing, the Chicago metro area lagged behind other metros, with only about 79K single family homes and 85K multifamily units given permits from 2012 to 2021.
With its local economy centered around tourism, it’s not surprising that the Miami metropolitan area performed better in terms of multifamily construction as opposed to single family housing. The metro area issued permits for 130K apartments between 2012 and 2021, compared to only 68K for single family homes. Miami also saw the addition of 56M square feet of industrial space, 19M square feet of office space and almost 9M of self storage space.
With a population increase of almost 13% from 2012 to 2021, to 3M residents currently, the Denver metropolitan area is truly a success story of the past decade – population growth goes hand in hand with economic and real estate development. The metro area saw over 100K multifamily units and 98K single family homes permitted during the period studied. The industrial sector added 56M square feet of new space, while 19M square feet of office space was also built in the Denver metro area during the past decade, with 2021 being the best year of the decade for both sectors.
With Americans decidedly favoring urban living, we can reasonably estimate that the country’s largest metros will continue to experience sustained construction activity in the residential and the commercial real estate sectors in the foreseeable future.