flexiblefullpage
billboard
interstitial1
catfish1
Currently Reading

Commercial real estate development growing at strongest pace since recovery began: NAIOP report

Commercial real estate development growing at strongest pace since recovery began: NAIOP report

Industrial, warehousing, office, and retail sectors see strong gains; Texas leads the nation in construction-value stats.


By NAIOP | July 21, 2014
According to NAIOP, Texas leads the nation in the value of new construction. Sho
According to NAIOP, Texas leads the nation in the value of new construction. Shown: Construction site of the Dallas City Perform

The commercial real estate development industry grew at the strongest pace since the economic recovery began in 2011, according to an annual report on the state of the industry released today by the NAIOP Research Foundation.  

The report, entitled “The Economic Impacts of Commercial Real Estate,” determined that the economic impact realized by the development process rose a significant 24.06% over the previous year, the largest gain since the market began to recover in 2011.

Direct expenditures for 2013 totaled $124 billion, up from $100 billion the year before, and resulted in the following economic contributions to the U.S. economy:

  • Total contribution to U.S. GDP reached $376.35 billion, up from $303.36 billion in 2012;
  • Personal earnings (or wages and salaries paid) totaled $120.02 billion, up from $96.75 billion in 2012; and
  • Jobs supported (a measure of both new and existing jobs) reached 2.81 million in 2013, up from 2.27 million the year before.

The report says that the outlook for the remainder of 2014 and into 2015 is that the figures will continue to rise, with year-over-year growth expected in the range of 8-15%.

Commercial real estate development has an immense ripple effect in the economy, providing wages and jobs that quickly roll over into increased consumer spending.

“Commercial development’s economic impact is tremendous; simply put, a healthy development industry is critical to a prosperous U.S. economy,” said Thomas J. Bisacquino, NAIOP president and CEO. “As the uneven pace of the nation's economic recovery continues, the industry seeks public policy certainty that bolsters investors’ and developers’ confidence. Despite this lack of assurance, we see positive indicators of a rebounding industry, but believe the industry could be more robust.”

Industrial, Warehousing, Office and Retail Show Strong Gains:

  • Industrial development posted a year-over-year gain of 48.5 percent due mainly to groundbreaking of energy-processing facilities.
  • Warehouse construction registered a third strong year of increased expenditures in 2013, gaining 38.1 percent in 2013. This is on top of 2012 growth of 28.4 percent and 2011 growth of 17.8 percent, showing a sustained increase in demand for warehousing space.
  • Office construction expenditures rose for a second year in 2013, up 23.3 percent from 2012.
  • Retail construction expenditures rose modestly for a third year in 2013, up 4.8 percent from 2012.

Operations and Maintenance Surge Even As Building Owners Cut Costs With Energy Efficiencies and New Technologies
Through increased energy efficiency and advanced technology, building owners cut the average per-square-foot cost of operating building space in the U.S. by 14 cents, from $3.20/square foot to $3.06/square foot. Still, maintaining and operating the existing 43.9 billion square feet of commercial real estate space resulted in $134.3 billion of direct expenditures, and resulted in the following economic contributions to the U.S economy:

  • Total contribution to GDP in 2013 $370.9 billion;
  • Personal earnings (wages and salaries) totaled $116.8 billion; and
  • Jobs supported, 2.9 million.

Top 10 States by Construction Value for Office, Industrial, Warehouse and Retail:
1.     Texas
2.     Louisiana
3.     New York
4.     California
5.     Iowa
6.     Florida
7.     Maryland
8.     Georgia
9.     West Virginia
10.  Oregon

Four new states joined the list: Louisiana, Maryland, West Virginia, and Georgia. These states made the top ten list due predominantly to development of highly specialized and expensive energy-related processing facilities. Illinois, Ohio, Massachusetts, and North Carolina dropped off the top 10 list, slipping to Nos. 11, 14, 15 and 18 respectively. 

The report includes detailed data on commercial real estate development activity in all 50 states, and also ranks the top 10 states specifically according to office, industrial, warehouse and retail categories.

The report is authored by Dr. Stephen S. Fuller, director of the Center for Regional Analysis at George Mason University, and funded by the NAIOP Research Foundation.

An executive summary and the full report is online: www.naiop.org/contributions2014.

 

Related Stories

Museums | Nov 5, 2020

The Weekly show: Designing cannabis facilities, Bob Borson's Life of an Architect, museum design

BD+C editors speak with experts from Cooper Robertson, Life of an Architect, and MJ12 Design Studio on the November 5 episode of "The Weekly." The episode is available for viewing on demand.

Multifamily Housing | Oct 30, 2020

The Weekly show: Multifamily security tips, the state of construction industry research, and AGC's market update

BD+C editors speak with experts from AGC, Charles Pankow Foundation, and Silva Consultants on the October 29 episode of "The Weekly." The episode is available for viewing on demand.

AEC Tech | Oct 28, 2020

Meet Jaibot, Hilti's new construction robot

The semi-autonomous robot is designed to assist MEP contractors with ceiling-drilling applications. 

Hotel Facilities | Oct 27, 2020

Hotel construction pipeline dips 7% in Q3 2020

Hospitality developers continue to closely monitor the impact the coronavirus will have on travel demand, according to Lodging Econometrics.

Data Centers | Oct 26, 2020

Speed to market is biggest obstacle for burgeoning data center construction sector

Hyperscale and edge computing are driving growth in data center and mission critical facilities construction.

Adaptive Reuse | Oct 26, 2020

Mall property redevelopments could result in dramatic property value drops

Retail conversions to fulfillment centers, apartments, schools, or medical offices could cut values 60% to 90%.

Multifamily Housing | Oct 15, 2020

L.A., all the way

KFA Architecture has hitched its wagon to Los Angeles’s star for more than 40 years.

Architects | Oct 14, 2020

The Weekly Show: AI for building facade inspections; designing a world-class architecture firm

The October 15 episode of BD+C's "The Weekly" is available for viewing on demand.

Coronavirus | Oct 8, 2020

The Weekly show: Statue of Liberty Museum, emotional learning in K-12, LA's climate change vulnerability

The October 8 episode of BD+C's "The Weekly" is available for viewing on demand.

Architects | Oct 8, 2020

Gensler’s annual report chronicles the firm’s ‘transformation’

The firm positions itself as a leading voice for how building design plays a central role in meeting society’s evolving demands.

boombox1
boombox2
native1

More In Category

Warehouses

California bill would limit where distribution centers can be built

A bill that passed the California legislature would limit where distribution centers can be located and impose other rules aimed at reducing air pollution and traffic. Assembly Bill 98 would tighten building standards for new warehouses and ban heavy diesel truck traffic next to sensitive sites including homes, schools, parks and nursing homes.




halfpage1

Most Popular Content

  1. 2021 Giants 400 Report
  2. Top 150 Architecture Firms for 2019
  3. 13 projects that represent the future of affordable housing
  4. Sagrada Familia completion date pushed back due to coronavirus
  5. Top 160 Architecture Firms 2021