The commercial real estate development industry in 2014 saw its best year since 2007, according to an annual report on the state of the industry released July 8 by the NAIOP Research Foundation. The report, entitled “The Economic Impacts of Commercial Real Estate,” determined that the economic contributions yielded by the development process increased significantly by 40% over the previous year, the largest gain since the market began to recover in 2011. Direct expenditures for 2014 totaled $174.31 billion, up from $124 billion the year before, and resulted in the following economic contributions to the U.S. economy:
- Total contribution to U.S. GDP reached $528.09 billion, up from $376.35 billion in 2013.
- Personal earnings (or wages and salaries paid) totaled $168.42 billion, up from $120.02 billion in 2013.
- Jobs supported (a measure of both new and existing jobs) reached 3.94 million in 2014, up from 2.81 million the year before.
“The industry is getting back to full health and making an even bigger contribution to our national economy, but it still has plenty of room to grow,” said Thomas J. Bisacquino, NAIOP president and CEO. “Office and industrial l were very strong and we believe the activity in these areas will keep accelerating. We hope Congress can agree on a bipartisan infrastructure investment package and continues to provide incentives for capital investment to keep the job creation going strong.”
2015 projections show accelerating construction spending, with single-digit gains in fixed investment in commercial structures such as office, retail, health care and distribution facilities. As construction continues to grow between 2014 and 2015, the U.S. economy’s growth rate is projected to increase from 2.4% in 2014 to 3.0% in 2015 and continue its expansion at least through 2020, according to IHS data in the report.
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 available here.