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B&G Foods reports strong net sales and earnings growth for second quarter 2020

— Net Cash Provided by Operating Activities Increased to $246.4 Million for the First Two Quarters of 2020 —

PARSIPPANY, N.J.–(BUSINESS WIRE)–B&G Foods, Inc. (NYSE: BGS) today announced financial results for the second quarter and first two quarters of 2020 and provided an update as to how the COVID-19 pandemic is impacting the Company.

Second Quarter 2020 Financial Summary (vs. Second Quarter 2019 where applicable):

  • Net sales increased 38.1% to $512.5 million
  • Base business net sales1 increased 33.9% to $496.9 million
  • Diluted earnings per share increased 150.0% to $0.70
  • Adjusted diluted earnings per share1 increased 86.8% to $0.71
  • Net income increased 146.1% to $44.9 million
  • Adjusted net income1 increased 87.6% to $46.0 million
  • Adjusted EBITDA1 increased 44.6% to $102.6 million
  • Net cash provided by operating activities for the first two quarters of 2020 increased to $246.4 million

“At B&G Foods we remain committed to the health and safety of our employees and doing our part to keep our nation supplied with food during this difficult time,” stated Kenneth G. Romanzi, President and Chief Executive Officer of B&G Foods. Mr. Romanzi continued, “Thanks to the tremendous efforts of our employees, we were able to achieve both of these goals during the second quarter. We had an outstanding second quarter in terms of net sales, net income, adjusted EBITDA and cash flow as our portfolio of brands served consumers very well as they continued to cook and eat more at home.”

“We continue to take a wide range of precautionary measures at our manufacturing facilities and other work locations in response to COVID-19. And, although we are operating in a very challenging environment, our employees have done a fantastic job ensuring that our supply chain has been able to meet an unprecedented increase in demand for our products.”

Mr. Romanzi, continued, “During the second half of the year, we remain focused on working closely with our supply chain partners and our customers to ensure that we can continue to provide uninterrupted service and meet the increased demand resulting from the pandemic. At the same time, we will continue our new product innovation and other brand building efforts as we look to turn some of this pandemic-related increase in demand into long-term growth opportunities for our brands.”

1

Please see “About Non-GAAP Financial Measures and Items Affecting Comparability” below for the definition of the non-GAAP financial measures “adjusted diluted earnings per share,” “adjusted net income,” “EBITDA,” “adjusted EBITDA” and “base business net sales,” as well as information concerning certain items affecting comparability and reconciliations of the non-GAAP terms to the most comparable GAAP financial measures.

Financial Results for the Second Quarter of 2020

Net sales for the second quarter of 2020 increased $141.3 million, or 38.1%, to $512.5 million from $371.2 million for the second quarter of 2019. The increase was primarily attributable to materially increased net sales resulting from increased demand for the Company’s products due to the COVID-19 pandemic. The Company’s net sales also benefited from the Clabber Girl and Farmwise acquisitions, which were completed on May 15, 2019 and February 19, 2020, respectively. An additional one and one-half months of net sales of Clabber Girl and an additional three months of net sales of Farmwise contributed $15.0 million and $0.6 million, respectively, to the Company’s net sales for the second quarter of 2020.

Base business net sales1 for the second quarter of 2020 increased $125.7 million, or 33.9%, to $496.9 million from $371.2 million for the second quarter of 2019. The increase in base business net sales reflected an increase in unit volume of $111.7 million and an increase in net pricing (inclusive of the impact of the Company’s 2019 list price increases, the trade spend optimization program the Company initiated in 2019, and a temporarily lower trade spend environment) of $15.3 million, or 4.1% of base business net sales, partially offset by the negative impact of foreign currency of $1.3 million.

Net sales of Green Giant (including Le Sueur) increased $51.2 million, or 45.4%; net sales of the Company’s spices & seasonings2 increased $17.4 million, or 21.4%; net sales of Ortega increased $12.8 million, or 37.4%; net sales of Cream of Wheat increased $6.3 million, or 54.0%; and net sales of Maple Grove Farms increased $0.2 million, or 1.5%, for the second quarter of 2020 as compared to the second quarter of 2019. Net sales of all other brands in the aggregate increased $37.8 million, or 33.3%, for the second quarter of 2020.

Gross profit was $134.1 million for the second quarter of 2020, or 26.2% of net sales. Excluding the negative impact of $0.5 million of acquisition/divestiture-related and non-recurring expenses during the second quarter of 2020, the Company’s gross profit would have been $134.6 million, or 26.3% of net sales. Gross profit was $91.9 million for the second quarter of 2019, or 24.7% of net sales. Excluding the negative impact of $4.9 million of acquisition/divestiture-related and non-recurring expenses during the second quarter of 2019, which includes expenses relating to the trailing non-cash accounting impact of the Company’s 2018 inventory reduction plan, the Company’s gross profit would have been $96.8 million, or 26.0% of net sales.

Selling, general and administrative expenses increased $4.4 million, or 11.3%, to $44.3 million for the second quarter of 2020 from $39.9 million for the second quarter of 2019. The increase was composed of increases in general and administrative expenses of $4.7 million and selling expenses of $2.7 million, partially offset by decreases in acquisition/divestiture-related and non-recurring expenses of $2.7 million, warehousing expenses of $0.2 million and consumer marketing expenses of $0.1 million. Expressed as a percentage of net sales, selling, general and administrative expenses improved by 2.0 percentage points to 8.7% for the second quarter of 2020, compared to 10.7% for the second quarter of 2019.

Net interest expense increased $1.6 million, or 7.2%, to $24.8 million for the second quarter of 2020 from $23.2 million in the second quarter of 2019. The increase was primarily attributable to an increase in average long-term debt outstanding during the second quarter of 2020 as compared to the second quarter of 2019, primarily as a result of borrowings made during the last three quarters of fiscal 2019 primarily to fund the Clabber Girl acquisition, to pay cash taxes resulting from the 2018 gain on sale of Pirate Brands and to fund the repurchase of shares of the Company’s common stock as part of the Company’s stock repurchase program, and a $100.0 million revolver draw made by the Company in March 2020, which was subsequently repaid in May and June 2020.

The Company’s net income was $44.9 million, or $0.70 per diluted share, for the second quarter of 2020, compared to net income of $18.3 million, or $0.28 per diluted share, for the second quarter of 2019. The Company’s adjusted net income1 for the second quarter of 2020 was $46.0 million, or $0.71 per adjusted diluted share, compared to $24.5 million, or $0.38 per adjusted diluted share, for the second quarter of 2019.

2

Includes the spices & seasoning brands acquired in the fourth quarter of 2016, as well as the Company’s legacy spices & seasonings brands, such as Dash and Ac’cent.

For the second quarter of 2020, adjusted EBITDA was $102.6 million, an increase of $31.6 million, or 44.6%, compared to $71.0 million for the second quarter of 2019. The increase in adjusted EBITDA was primarily attributable to the positive impact of increased base business unit volume on the Company’s net sales as a result of the COVID-19 pandemic, as well as increased net sales due to an extra one and one-half months of net sales of Clabber Girl in the second quarter of 2020. Adjusted EBITDA as a percentage of net sales was 20.0% for the second quarter of 2020, compared to 19.1% in the second quarter of 2019.

Financial Results for the First Two Quarters of 2020

Net sales for the first two quarters of 2020 increased $178.0 million, or 22.7%, to $961.9 million from $783.9 million for the first two quarters of 2019. The increase was primarily attributable to materially increased net sales in March through June 2020 (as compared to March through June 2019) resulting from increased demand for the Company’s products due to the COVID-19 pandemic. The Company’s net sales also benefited from the Clabber Girl and Farmwise acquisitions, which were completed on May 15, 2019 and February 19, 2020, respectively. An additional four and one-half months of net sales of Clabber Girl and an additional four and one-half months of net sales of Farmwise contributed $33.7 million and $0.8 million, respectively, to the Company’s net sales for the first two quarters of 2020.

Base business net sales for the first two quarters of 2020 increased $143.5 million, or 18.3%, to $927.4 million from $783.9 million for the first two quarters of 2019. The increase in base business net sales reflected an increase in unit volume of $119.9 million and an increase in net pricing (inclusive of the impact of the Company’s 2019 list price increases, the trade spend optimization program the Company initiated in 2019, and a temporarily lower trade spend environment) of $24.5 million, or 3.1% of base business net sales, partially offset by the negative impact of foreign currency of $0.9 million.

Net sales of Green Giant (including Le Sueur) increased $73.5 million, or 29.5%; net sales of Ortega increased $14.3 million, or 20.0%; net sales of Cream of Wheat increased $7.8 million, or 26.9%; net sales of the Company’s spices & seasonings2 increased $4.5 million, or 2.7%; and net sales of Maple Grove Farms increased $0.8 million, or 2.3%, in the first two quarters of 2020, as compared to the first two quarters of 2019. Net sales of all other brands in the aggregate increased $42.6 million, or 18.4%, for the first two quarters of 2020.

Gross profit was $239.0 million for the first two quarters of 2020, or 24.8% of net sales. Excluding the negative impact of $2.8 million of acquisition/divestiture-related and non-recurring expenses during the first two quarters of 2020, the Company’s gross profit would have been $241.8 million, or 25.1% of net sales. Gross profit was $179.9 million for the first two quarters of 2019, or 23.0% of net sales. Excluding the negative impact of $18.0 million of acquisition/divestiture-related and non-recurring expenses during the first two quarters of 2019, which includes expenses relating to the trailing non-cash accounting impact of the Company’s 2018 inventory reduction plan, the Company’s gross profit would have been $197.9 million, or 25.2% of net sales.

Selling, general and administrative expenses increased $6.1 million, or 7.9%, to $84.3 million for the first two quarters of 2020 from $78.2 million for the first two quarters of 2019. The increase was composed of increases in general and administrative expenses of $6.4 million and selling expenses of $4.7 million, partially offset by decreases in acquisition/divestiture-related and non-recurring expenses of $3.8 million, warehousing expenses of $0.6 million and consumer marketing expenses of $0.6 million. Expressed as a percentage of net sales, selling, general and administrative expenses improved by 1.2 percentage points to 8.8% for the first two quarters of 2020, compared to 10.0% for the first two quarters of 2019.

Net interest expense increased $4.6 million, or 10.0%, to $50.9 million for the first two quarters of 2020 from $46.3 million in the first two quarters of 2019. The increase was primarily attributable to an increase in average long-term debt outstanding during the first two quarters of 2020 as compared to the first two quarters of 2019, primarily as a result of borrowings made during the last three quarters of fiscal 2019 primarily to fund the Clabber Girl acquisition, to pay cash taxes resulting from the 2018 gain on sale of Pirate Brands and to fund the repurchase of shares of the Company’s common stock as part of the Company’s stock repurchase program, and a $100.0 million revolver draw made by the Company in March 2020, which was subsequently repaid in May and June 2020.

The Company’s net income was $73.0 million, or $1.14 per diluted share, for the first two quarters of 2020, compared to net income of $35.0 million, or $0.53 per diluted share, for the first two quarters of 2019. The Company’s adjusted net income for the first two quarters of 2020 was $75.3 million, or $1.17 per adjusted diluted share, compared to $53.5 million, or $0.82 per adjusted diluted share, for the first two quarters of 2019.

For the first two quarters of 2020, adjusted EBITDA was $183.3 million, an increase of $36.5 million, or 24.9%, compared to $146.8 million for the first two quarters of 2019. The increase in adjusted EBITDA was primarily attributable to the positive impact of increased base business unit volume on the Company’s net sales as a result of the COVID-19 pandemic, as well as increased net sales due to an extra four and one-half months of Clabber Girl in the first two quarters of 2020. Adjusted EBITDA as a percentage of net sales was 19.1% for the first two quarters of 2020, compared to 18.7% in the first two quarters of 2019.

Full Year Fiscal 2020 Guidance

Although B&G Foods’ management continues to believe that B&G Foods’ net sales and adjusted EBITDA for full year fiscal 2020 will materially exceed the full year fiscal 2020 net sales and adjusted EBITDA guidance provided by management when the Company reported fiscal 2019 results in February 2020, the Company’s management is unable to fully estimate the impact the COVID-19 pandemic will have on the Company’s third quarter and full year fiscal 2020 results and therefore is unable at this time to provide guidance for the remainder of 2020. The ultimate impact of the COVID-19 pandemic on the Company’s business will depend on many factors, including, among others, the duration of social distancing and stay-at-home mandates and whether a second or third wave of COVID-19 will affect the United States and the rest of North America, the Company’s ability to continue to operate its manufacturing facilities, maintain its supply chain without material disruption, procure ingredients, packaging and other raw materials when needed despite unprecedented demand in the food industry, and the extent to which macroeconomic conditions resulting from the pandemic and the pace of the subsequent recovery may impact consumer eating habits.

Conference Call

B&G Foods will hold a conference call at 4:30 p.m. ET today, July 30, 2020 to discuss second quarter 2020 financial results. The live audio webcast of the conference call can be accessed at www.bgfoods.com/investor-relations. A replay of the webcast will be available following the conference call through the same link.

About Non-GAAP Financial Measures and Items Affecting Comparability

“Adjusted net income” (net income adjusted for certain items that affect comparability), “adjusted diluted earnings per share,” (diluted earnings per share adjusted for certain items that affect comparability), “base business net sales” (net sales without the impact of acquisitions until the acquisitions are included in both comparable periods and without the impact of discontinued or divested brands), “EBITDA” (net income before net interest expense, income taxes, depreciation and amortization and loss on extinguishment of debt) and “adjusted EBITDA” (EBITDA as adjusted for cash and non-cash acquisition/divestiture-related expenses, gains and losses (which may include third party fees and expenses, integration, restructuring and consolidation expenses, amortization of acquired inventory fair value step-up and gains and losses on sale of assets), non-recurring expenses, gains and losses and the non-cash accounting impact of the Company’s inventory reduction plan) are “non-GAAP financial measures.” A non-GAAP financial measure is a numerical measure of financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States (GAAP) in B&G Foods’ consolidated balance sheets and related consolidated statements of operations, comprehensive income, changes in stockholders’ equity and cash flows. Non-GAAP financial measures should not be considered in isolation or as a substitute for the most directly comparable GAAP measures. The Company’s non-GAAP financial measures may be different from non-GAAP financial measures used by other companies.

The Company uses non-GAAP financial measures to adjust for certain items that affect comparability. This information is provided in order to allow investors to make meaningful comparisons of the Company’s operating performance between periods and to view the Company’s business from the same perspective as the Company’s management. Because the Company cannot predict the timing and amount of these items that affect comparability, management does not consider these items when evaluating the Company’s performance or when making decisions regarding allocation of resources.

Additional information regarding EBITDA and adjusted EBITDA, and a reconciliation of EBITDA and adjusted EBITDA to net income and to net cash provided by operating activities, is included below for the second quarter and first two quarters of 2020 and 2019, along with the components of EBITDA and adjusted EBITDA. Also included below are reconciliations of the non-GAAP terms adjusted net income, adjusted diluted earnings per share and base business net sales to the most directly comparable measure calculated and presented in accordance with GAAP in the Company’s consolidated balance sheets and related consolidated statements of operations, comprehensive income, changes in stockholders’ equity and cash flows.

About B&G Foods, Inc.

Based in Parsippany, New Jersey, B&G Foods and its subsidiaries manufacture, sell and distribute high-quality, branded shelf-stable and frozen foods across the United States, Canada and Puerto Rico. With B&G Foods’ diverse portfolio of more than 50 brands you know and love, including Back to Nature, B&G, B&M, Cream of Wheat, Dash, Green Giant, Las Palmas, Le Sueur, Mama Mary’s, Maple Grove Farms, New York Style, Ortega, Polaner, Spice Islands and Victoria, there’s a little something for everyone. For more information about B&G Foods and its brands, please visit www.bgfoods.com.

Forward-Looking Statements

Statements in this press release that are not statements of historical or current fact constitute “forward-looking statements.” The forward-looking statements contained in this press release include, without limitation, statements related to B&G Foods’ net sales, adjusted EBITDA and overall expectations for fiscal 2020 and beyond, including statements related to the future impact of the COVID-19 pandemic on the Company’s business and financial results, ability to provide uninterrupted service and meet the increased demand resulting from the pandemic, and the Company’s plans to continue new product innovation and other brand building efforts to promote long-term growth opportunities. Such forward-looking statements involve known and unknown risks, uncertainties and other unknown factors that could cause the actual results of B&G Foods to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. In addition to statements that explicitly describe such risks and uncertainties, readers are urged to consider statements labeled with the terms “believes,” “belief,” “expects,” “projects,” “intends,” “anticipates,” “assumes,” “could,” “should,” “estimates,” “potential,” “seek,” “predict,” “may,” “will” or “plans” and similar references to future periods to be uncertain and forward-looking. Factors that may affect actual results include, without limitation: the impact of the COVID-19 pandemic on the Company’s business, including, without limitation, the ability of the Company and its supply chain partners to continue to operate manufacturing facilities, distribution centers and other work locations without material disruption; the Company’s substantial leverage; the effects of rising costs for the Company’s raw materials, packaging and ingredients; crude oil prices and their impact on distribution, packaging and energy costs; the Company’s ability to successfully implement sales price increases and cost saving measures to offset any cost increases; intense competition, changes in consumer preferences, demand for the Company’s products and local economic and market conditions; the Company’s continued ability to promote brand equity successfully, to anticipate and respond to new consumer trends, to develop new products and markets, to broaden brand portfolios in order to compete effectively with lower priced products and in markets that are consolidating at the retail and manufacturing levels and to improve productivity; the risks associated with the expansion of the Company’s business; the Company’s possible inability to identify new acquisitions or to integrate recent or future acquisitions or the Company’s failure to realize anticipated revenue enhancements, cost savings or other synergies; tax reform and legislation, including the effects of the U.S. Tax Cuts and Jobs Act and the U.S. CARES Act; the Company’s ability to access the credit markets and the Company’s borrowing costs and credit ratings, which may be influenced by credit markets generally and the credit ratings of the Company’s competitors; unanticipated expenses, including, without limitation, litigation or legal settlement expenses; the effects of currency movements of the Canadian dollar and the Mexican peso as compared to the U.S. dollar; the effects of international trade disputes, tariffs, quotas, and other import or export restrictions on the Company’s international procurement, sales and operations; future impairments of the Company’s goodwill and intangible assets; the Company’s ability to successfully complete the implementation of additional modules and the integration and operation of a new enterprise resource planning (ERP) system; the Company’s ability to protect information systems against, or effectively respond to, a cybersecurity incident or other disruption; the Company’s sustainability initiatives and changes to environmental laws and regulations; and other factors that affect the food industry generally. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described from time to time in B&G Foods’ filings with the Securities and Exchange Commission, including under Item 1A, “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and in its subsequent reports on Forms 10-Q and 8‑K. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. B&G Foods undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

B&G Foods, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands, except share and per share data)

(Unaudited)

June 27,

December 28,

2020

2019

Assets

Current assets:

Cash and cash equivalents

$

181,200

$

11,315

Trade accounts receivable, net

141,216

143,908

Inventories

356,803

472,187

Prepaid expenses and other current assets

34,434

25,449

Income tax receivable

4,196

8,934

Total current assets

717,849

661,793

Property, plant and equipment, net

283,827

304,934

Operating lease right-of-use assets, net

35,925

38,698

Goodwill

598,860

596,391

Other intangible assets, net

1,606,164

1,615,126

Other assets

3,017

3,277

Deferred income taxes

6,180

7,371

Total assets

$

3,251,822

$

3,227,590

Liabilities and Stockholders’ Equity

Current liabilities:

Trade accounts payable

$

122,887

$

114,936

Accrued expenses

58,780

55,659

Current portion of operating lease liabilities

10,946

9,813

Current portion of long-term debt

4,500

5,625

Income tax payable

2,297

454

Dividends payable

30,476

30,421

Total current liabilities

229,886

216,908

Long-term debt

1,874,442

1,874,158

Deferred income taxes

268,962

254,339

Long-term operating lease liabilities, net of current portion

28,003

31,997

Other liabilities

33,380

37,646

Total liabilities

2,434,673

2,415,048

Stockholders’ equity:

Preferred stock, $0.01 par value per share. Authorized 1,000,000 shares; no shares issued or outstanding

—

—

Common stock, $0.01 par value per share. Authorized 125,000,000 shares; 64,160,453 and 64,044,649 shares issued and outstanding as of June 27, 2020 and December 28, 2019, respectively

642

640

Additional paid-in capital

—

—

Accumulated other comprehensive loss

(44,057

)

(31,894

)

Retained earnings

860,564

843,796

Total stockholders’ equity

817,149

812,542

Total liabilities and stockholders’ equity

$

3,251,822

$

3,227,590

Contacts

Investor Relations:

ICR, Inc.

Dara Dierks

866.211.8151

Media Relations:

ICR, Inc.

Matt Lindberg

203.682.8214

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Categories
Business

COVID-19 crushes construction starts in most metro areas during first-half 2020

New York and Washington DC top the list despite sizable declines in construction

HAMILTON, N.J.–(BUSINESS WIRE)–The COVID-19 pandemic and resulting recession have wreaked havoc on U.S. building markets. According to Dodge Data & Analytics, commercial and multifamily starts were quite healthy during January and February but stalled as the pandemic hit the nation in March. For the first three months of 2020, U.S. multifamily and commercial building starts inched up 1% from the same period of 2019. The commercial and multifamily group is comprised of office buildings, stores, hotels, warehouses, commercial garages, and multifamily housing. Not included in this ranking are institutional building projects (such as educational facilities, hospitals, convention centers, casinos, transportation terminals), manufacturing buildings, single family housing, public works, and electric utilities/gas plants.


The full force of the pandemic bore down on U.S. construction starts in April as economic activity virtually shut down and local restrictions on construction took effect. Construction resumed in some areas in May allowing starts to post a mild gain over the month. Advances continued in June. However, the damage to commercial and multifamily construction during the first half of the year was palpable. Starts plunged 22% below the first half of 2019, with only warehouse construction posting a very small gain. Commercial and multifamily construction starts in the top 20 metropolitan areas posted a similar drop of 22% through the first six months of 2020.

In the top 10 metro areas, commercial and multifamily starts slid 21% and only one metro area posted an increase. The New York metro area held on to its top spot, despite falling 24% below year-ago levels to $11.5 billion. Washington DC held to second place even though commercial and multifamily construction starts fell 42% to $4.2 billion. The Dallas TX metro area rounded out the top three, with commercial and multifamily activity dropping just 2% to $3.8 billion. The remaining markets in the top 10 were Los Angeles CA (-18% to $3.3 billion), Chicago IL (-9% to $3.0 billion), Boston MA (-31% to $3.0 billion), Miami FL (-16% to $2.8 billion), Phoenix AZ (+82% to $2.8 billion), Austin TX (-12% to $2.4 billion), and Houston TX (-38% to $2.4 billion).

Among the second-tier (ranked 11-20) metro areas, commercial and multifamily starts plummeted 25% with just one metro area posting an increase. The second tier metros include Atlanta GA (-32% to $2.4 billion), Philadelphia PA (-25% to $2.1 billion), Seattle WA (-26% to $1.6 billion), Orlando FL (-28% to $1.3 billion), Nashville TN (-45% to $1.3 billion), Portland OR (-33% to $1.1 billion), Denver CO (-15% to $1.1 billion), Kansas City MO (-20% to $1.1 billion), Tampa FL (-19% to $941 million), and Detroit MI (+96% to $929 million).

“The COVID-19 pandemic and recession have devastated most local construction markets,” stated Richard Branch, Chief Economist for Dodge Data & Analytics. “Across the board, building projects have been halted or delayed with virtually no sector immune from damage. Construction starts have begun to increase from their April lows and there is cautious optimism that as the year progresses construction markets around the country will begin a modest recovery. However, the recent acceleration of COVID-19 cases in the South and West as well as the upcoming expiration of expanded unemployment insurance benefits (from the CARES Act) puts the recovery at significant risk and could undermine the construction sector’s ability to grow.”

During the first half of 2020, commercial and multifamily starts in New York NY fell 24% to $11.5 billion relative to the first six months of 2019. Commercial starts were 18% lower, a relatively sanguine decline given the almost two-month ban on nonessential construction in the city. However, the modest impact on construction was due to the start of two very large office projects that broke ground in February — the $1.3 billion Two Manhattan West office building and the $760 million Disney/ABC Headquarters. Removing those two buildings would have resulted in a 50% decline in commercial starts during the first half of the year. Multifamily starts dropped 29% in the first six months of the year. The largest multifamily projects to get underway were the $420 million Hunter’s Point South mixed-use project in Long Island City NY and the $260 million 451 10th Ave. apartment building.

In Washington DC, commercial and multifamily starts fell 42% to $4.2 billion during the first half of 2020 relative to the same period of 2019. Multifamily starts lost 27% over this year’s first six months. The largest multifamily projects were the $150 million Ripley II–Solaire Apartments in Silver Spring MD and the $150 million Storey Park mixed-use building in Washington DC. Commercial starts fell 50% during the first half of the year, with the only gain coming from the hotel sector, which posted a $67 million gain (38%) over 2019. The largest commercial project to break ground in the Washington DC metro was the $306 million Aligned Energy Data Center (Building II) in Ashburn VA. Amazon Inc. also broke ground on two buildings associated with the HQ2 project in Arlington VA, each totaling $240 million.

Commercial and multifamily starts in the Dallas TX metro area hit $3.8 billion in the first six months of the year, a decline of just 2% from 2019’s first half. Multifamily starts gained 8%, one of the few top metros to post a gain in this market. The largest multifamily projects to get started in the first six months were the $75 million Novel Turtle Creek residential tower in Dallas TX and the $65 million Shannon Creek apartments in Burleson TX. Commercial starts fell 6% in this year’s first six months, with declines in hotel, office, and parking structures partly offset by gains in retail and warehouse starts. The largest commercial projects were the $136 million Epic Deep Ellum (building II) in Dallas TX and the $100 million American Airlines flight kitchen (food service is considered part of the retail sector).

Los Angeles CA commercial and multifamily starts dropped 18% during the first six months of 2020 to $3.3 billion. Commercial starts fell 9% on a year-to-date basis, with strength coming from the office market which posted a large gain. That gain, however, was not enough to offset declines elsewhere in the commercial space. The largest commercial projects to break ground during the first half of 2020 were the $355 million Fig + Pico AC Marriott/Hilton hotel in Los Angeles and the $240 million first phase of the Iceberg Tower office project in Burbank. Multifamily starts were down 26% over the same time period. The largest multifamily projects to start during the first half of the year were the $95 million 3535 W 8th St. mixed-use project in Los Angeles and the $93 million First Point residential building in Santa Ana CA.

Commercial and multifamily starts in Chicago IL were 9% lower on a year-to-date basis through June, reaching $3.0 billion. Commercial starts increased 24% on the strength of a near-doubling in office starts as well as an increase in hotel construction that more than offset steep declines in retail, warehouses, and parking structures. The two largest commercial projects to get underway in the first six months of 2020 were the $476 million BMO Office Tower and the $360 million Wolf Point South Tower B, both in Chicago. Multifamily starts in 2020 were 44% lower than in the first half of 2019. The largest multifamily structures to get started were the $150 million 354 N Union apartments in Chicago and the $100 million Maple Street Lofts in Mount Prospect.

During the first half of 2020, commercial and multifamily starts in Boston MA declined by 30% to $3.0 billion. Multifamily starts dropped 10% on a year-to-date basis. The largest multifamily projects to get underway were the $150 million Cambridge Crossing (Parcel I) complex in Cambridge MA and the $115 million Woburn Avalon Bay project in Woburn MA. Starts on the commercial side fell 43% with all commercial sectors except warehouses posting a decline. The largest commercial projects were the $450 million first phase of the South Station Office Tower and the $250 million Seaport Square/400 Summer Street office building, both in Boston.

Miami FL commercial and multifamily starts fell 16% year-to-date through June to $2.8 billion. Multifamily construction was 11% lower over the same time period. The largest multifamily projects to break ground in the first six months were the $249 million Downtown 5th Luxury Apartments in Miami and the $115 million Miami Urban Village apartments in Homestead. On the commercial side, starts were 22% lower, with warehouse starts the only sector to post a gain year-to-date. The largest commercial projects were the $80 million Pier Sixty-Six Hotel and a $67 million Home Depot distribution center.

Commercial and multifamily construction starts in Phoenix AZ bucked the national trend posting a sizeable 82% increase to $2.8 billion during the first half of 2020 relative to the same time frame in 2019. The increase was fueled by the start of some sizeable projects. Multifamily starts rose sharply, jumping 85%. The largest multifamily projects to get started were the $300 million Pier 202 mixed-use building and the $125 million Adeline Residences at Collier Center, both in Tempe. Commercial starts meanwhile rose 79%. The largest commercial projects were the $200 million 100 Mill Ave office development and the $115 million Park 303 warehouse building.

Year-to-date commercial and multifamily construction starts in Austin TX fell 12% through June to $2.4 billion. Multifamily starts increased 21% in the first half of 2020, boosted by the $150 million 44 East Condo Tower and the $120 million Hanover Republic Square apartment building. Commercial starts fell 28% during the first six months despite sizeable gains in warehouse and hotel starts. The largest commercial projects were the $300 million Project Charm Amazon distribution center and the $89 million Capitol Complex Office Building.

Completing the top 10 for commercial and multifamily construction starts was Houston TX where starts were 38% lower at $2.4 billion through the first six months of 2020. Multifamily starts posted a 38% decline through June. The largest multifamily projects to break ground were the $217 million Hanover Square & Bayou Apartments as well as the $70 million Boone Manor Apartments. Commercial starts also fell 38% during the first six months of the year, with only parking structures posting a gain. The largest commercial projects to start were the $100 million Hewlett Packard Enterprises Campus @ Cityplace and the $58 million Empire West Business Park.

About Dodge Data & Analytics: Dodge Data & Analytics is North America’s leading provider of commercial construction project data, market forecasting & analytics services and workflow integration solutions for the construction industry. Building product manufacturers, architects, engineers, contractors, and service providers leverage Dodge to identify and pursue unseen growth opportunities that help them grow their business. On a local, regional or national level, Dodge empowers its customers to better understand their markets, uncover key relationships, size growth opportunities, and pursue specific sales opportunities with success. The company’s construction project information is the most comprehensive and verified in the industry. Dodge is leveraging its more than 125-year-old legacy of continuous innovation to help the industry meet the building challenges of the future. Learn more at www.construction.com.

Contacts

Media: Nicole Sullivan | AFFECT Public Relations & Social Media | +1-212-398-9680, nsullivan@affectstrategies.com