Dodge Finds a Dip in Commercial Properties Entering Planning Stage

(Illustration courtesy of Dodge Construction Network)

The Dodge Momentum Index–a measure of the value of nonresidential building projects going into planning–decreased 4.2% in September, and commercial properties entering the planning stage contracted 7.8%, according to the Dodge Construction Network, Bedford, Mass.

“Despite this month’s decline, the Dodge Momentum Index remains at very robust levels,” said Sarah Martin, associate director of forecasting at Dodge Construction Network. “A surge in data center activity drove much of the recent rapid growth [in the index]–so as planning for that sector moderated over the month, overall commercial planning fell back.”

Martin said the Federal Reserve’s recent rate cuts should spur planning projects to reach the groundbreaking stage more quickly, “leading to stronger nonresidential activity as 2025 progresses.”

Commercial planning generally receded over the month, the report said. “After gaining some steam in recent months, warehouse, office and stores planning activity all slowed down,” Dodge siad. “Hotels, on the other hand, have been gaining speed over the past five months, expanding steadily in September.”

The index’s commercial real estate segment was up 31% from year-ago levels.

 A total of 28 projects valued at $100 million or more entered planning in September, Dodge reported. The largest commercial projects included the $390 million Project Nova Data Center in Eagan, Minn. and Phase 1 and 2 of the SNA Data Center in Cedar Rapids, Iowa, valued at $375 million per phase. 

The Dodge Momentum Index is a snapshot of nonresidential building projects going into the planning stage, which generally leads actual construction spending by a full year.