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/
Related Stories
| Mar 11, 2011
Guests can check out hotel’s urban loft design, music selection
MODO, Advaya Hospitality’s affordable new lifestyle hotel brand, will have an urban Bauhaus loft design and target design-, music-, and tech-savvy guest who will have access to thousands of tracks in vinyl, CD, and MP3 formats through a partnership with Downtown Music. Guest can create their own playlists, and each guest room will feature iPod docks and large flat-screen TVs.
| Mar 11, 2011
Construction of helicopter hangars in South Carolina gets off the ground
Construction is under way on a $26 million aviation support facility for South Carolina National Guard helicopters. Hendrick Construction, the project’s Charlotte, N.C.-based GC, is building the 111,000-sf Donaldson Hangar facility on the 30-acre South Carolina Technology & Aviation Center, Greenville.
| Mar 11, 2011
Texas A&M mixed-use community will focus on green living
HOK, Realty Appreciation, and Texas A&M University are working on the Urban Living Laboratory, a 1.2-million-sf mixed-use project owned by the university. The five-phase, live-work-play project will include offices, retail, multifamily apartments, and two hotels.
| Mar 11, 2011
Chicago office building will serve tenants and historic church
The Alter Group is partnering with White Oak Realty Partners to develop a 490,000-sf high-performance office building in Chicago’s West Loop. The tower will be located on land owned by Old St. Patrick’s Church (a neighborhood landmark that survived the Chicago Fire of 1871) that’s currently being used as a parking lot.
| Mar 11, 2011
Community sports center in Nashville features NCAA-grade training facility
A multisport community facility in Nashville featuring a training facility that will meet NCAA Division I standards is being constructed by St. Louis-based Clayco and Chicago-based Pinnacle.
| Mar 11, 2011
Slam dunk for the University of Nebraska’s basketball arena
The University of Nebraska men’s and women’s basketball programs will have a new home beginning in 2013. Designed by the DLR Group, the $344 million West Haymarket Civic Arena in Lincoln, Neb., will have 16,000 seats, suites, club amenities, loge, dedicated locker rooms, training rooms, and support space for game operations.
| Mar 10, 2011
Steel Joists Clean Up a Car Wash’s Carbon Footprint
Open-web bowstring trusses and steel joists give a Utah car wash architectural interest, reduce its construction costs, and help green a building type with a reputation for being wasteful.
| Mar 10, 2011
How AEC Professionals Are Using Social Media
You like LinkedIn. You’re not too sure about blogs. For many AEC professionals, it’s still wait-and-see when it comes to social media.
| Mar 9, 2011
Hoping to win over a community, Facebook scraps its fortress architecture
Facebook is moving from its tony Palo Alto, Calif., locale to blue-collar Belle Haven, and the social network want to woo residents with community-oriented design.
| Mar 9, 2011
Winners of the 2011 eVolo Skyscraper Competition
Winners of the eVolo 2011 Skyscraper Competition include a high-rise recycling center in New Delhi, India, a dome-like horizontal skyscraper in France that harvests solar energy and collects rainwater, and the Hoover Dam reimagined as an inhabitable skyscraper.
