March 14, 2018
Commercial Real Estate Making Positive Impact on Economy
Commercial real estate pumped more than $935 billion into the economy and supported 7.6 million jobs in the U.S. in 2017, according to a new report from the NAIOP Research Foundation. It also generated more than $286 billion in salaries and wages.
The report, titled “The Economic Impacts of Commercial Real Estate,” was sponsored by the NAIOP in conjunction with Dodge Data & Analytics. It was written by Stephen S. Fuller, Ph.D., director of the Stephen J. Fuller Institute at George Mason University in Arlington, Virginia.
The NAIOP has published the study annually since 2008 to gauge the contributions that commercial real estate development has on the nation’s economy.
Expenditures for Commercial Buildings Up in 2017
Total hard construction expenditures for four commercial building types – office, industrial, warehouse and retail –totaled $98.6 billion, an 18.9% or $15.6 billion increase from 2016. Office and retail construction were only slightly down, but office construction had seen a large 28.7% increase in 2016. Warehouse and industrial construction, on the other hand, saw large increases in 2017. Here is the breakdown in expenditures by commercial construction type for 2017:
- Office Construction – $36.5 billion in expenditures, down by 0.4% from 2016
- Retail Construction – $17.1 billion, down from 0.8% from 2016
- Warehouse Construction – $21.1 billion, up 55.7% from 2016
- Industrial Construction – $23.9 billion, up 52.5% from 2016
Existing Commercial Real Estate Also Helped the Economy
Besides nonresidential construction, the study also included the contributions that existing commercial buildings had on the economy in 2017. It found that 46.4 billion square feet of existing commercial buildings:
- Resulted in direct expenditures for building operations totaling approximately $155.2 billion.
- Contributed $394.1 billion to the economy.
- Generated $112.9 billion in wages and salaries.
- Supported four million jobs.
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