US REITs and Lodging: Brick by Brick – An In-Depth Look into August Construction Starts

Annualized commercial real estate construction starts in August were down -8.2% sequentially, down -16.7% year over year, and are -19.5% below the 12-month peak. On a 3-month moving average (3-MMA), construction starts were mostly flat sequentially and down -11.6% y/y. Annualized starts represent ~1.5% of overall stock, below the long-term average of ~2% since 1970. While monthly readings are volatile, we expect starts to remain subdued given elevated construction costs and higher interest rates. Overall Trends — Per our proprietary analysis using FW Dodge data, aggregate annualized construction starts on a 3-month moving average basis were flat at ~1,262msf in August;