Estimating the Size of the Commercial Real Estate Market in The U.S. (#1) · Issues · Ashley Conley / rrbuildtech

Estimating the Size of the Commercial Real Estate Market in The U.S.

Estimating the Size of the Commercial Real Estate Market in the U.S.

1. Home 2. REIT Data 3. Research 4. Nareit Research

The approximated total dollar worth of industrial real estate was $20.7 trillion as of 2021: Q2.

Highlights

This research study note sums up a research study by Nareit mainly using data from CoStar that approximates the total dollar worth of industrial real estate was $20.7 trillion as of 2021: Q2. This study updates and builds upon the approach for Nareit's previous quotes of the industrial realty market.

Table 1 summarizes the price quotes by residential or commercial property sector. The overall quote is $20.7 trillion. Measurement concerns with the underlying information suggest that the actual value of total CRE may differ from this point estimate. An evaluation of these sources of unpredictability recommends that the real value is highly likely to fall within a range of $18 - $22 trillion. These estimates are based on a bottom-up technique utilizing the best offered data for each residential or commercial property sector.

We likewise estimate total REIT holdings of industrial property utilizing information from Capital IQ Pro. For the 2nd quarter of 2021, REITs make up an estimated 9.4% of the overall CRE market. REITs tend to concentrate on institutional-quality residential or commercial properties that are newer and of higher quality than numerous other business residential or commercial properties that are owned by personal financiers. We estimate the total value of these "REIT-like" residential or commercial properties to be approximately 50% of the total CRE market which the REIT share of "REIT-like" residential or commercial properties is 18.7% for the 2nd quarter of 2021.

Chart 1 reveals a time series of the REIT share of the overall CRE market and the REIT share of the REIT-like CRE market.

Methodology

To approximate the size of the commercial realty market, we use a multi-step method based upon the finest readily available data for each residential or commercial property sector.

- We start by identifying and approximating the number of systems (for multifamily) and overall square footage (for other residential or commercial property sectors) by residential or commercial property sector and residential or commercial property quality type for the biggest 200 markets in the U.S. This process used CoStar's information covering the Office, Retail, Multifamily, and Industrial residential or commercial property sectors that supplied overall square footage and units along with the average price per square foot (for office, retail, and industrial) or per unit (for multifamily).

The information on square footage and typical price by residential or commercial property type (for retail: General Retail, Mall, Neighborhood Center, and Strip Center; for commercial: Flex, Logistics, and Specialized), CoStar quality rating (1-2 Star, 3 Star, 4-5 Star), and groups of city areas (entrance cities, next largest 48 metro locations, and all other city areas) enable more analysis of the geographical distribution of industrial realty across the country and estimates of institutional-grade industrial genuine estate versus all other. These quotes in turn are helpful for calculating the REIT share of industrial real estate by residential or commercial property sector.
To estimate worths for the Healthcare and Hospitality sectors where we do not have disaggregated overalls readily available from CoStar, we use the worths from an aggregate analysis of commercial property market size carried out by CoStar, updated utilizing aggregate development rate assumptions.
To estimate the worth of Data Centers and Towers, we estimate the total worth of REITs in these residential or commercial property sectors and earn up to cover the whole market using assumptions on the REIT portion of these sectors (50% for Data Centers and 75% for Towers). Recent Nareit-sponsored research study on cell tower REITs highlights their importance in the CRE market. The computed value for Data Centers is subtracted from the Industrial total, as it is consisted of in the CoStar estimate of overall square video footage of Industrial residential or commercial properties.
We estimate the REIT share of the business realty market by using information from S&P Capital IQ Pro on the Real Estate Value of REITs. We include up the overall Property Value for the most current quarter and divide by the overall worth of the CRE market.
To develop a time series for REIT share, we use observed data on the total size of the CRE market since 2012. For many years before 2012, we assume an 8% growth in overall worth for each year going back to 1995. For the years 2007 - 2011, we follow various conventions to represent the results of the Great Financial Crisis. In 2007, we estimate that the overall CRE value decreased the very same percent as REITs. This percent decline is the very same for both parts in 2008. In 2009 - 2011, both the total market and the REIT values increase to 1/4, 1/2, and 3/4 of the method to the 2012 worth, respectively.
In addition to estimating the REIT share of the overall market, we also approximate the REIT share of 'REIT-like residential or commercial properties.' REITs do not own many older, lower quality, or smaller sized residential or commercial properties that are owned by private financiers. Therefore, we estimate that half of the overall market is "REIT-like" residential or commercial properties and we divided the REIT value by that number to approximate the REIT share of "REIT-like" residential or commercial properties.

Estimating the Size of the Commercial Real Estate Market in the U.S. 
 1. Home
2. REIT Data
3. Research
4. Nareit Research 
 The [approximated](https://ssrealestate.ae) total dollar worth of [industrial real](https://realestategrupo.com) estate was $20.7 trillion as of 2021: Q2. 
 Highlights 
 This research study note sums up a research study by Nareit mainly using data from CoStar that approximates the total dollar worth of industrial real estate was $20.7 trillion as of 2021: Q2. This study updates and builds upon the approach for Nareit's previous quotes of the industrial realty market. 
 Table 1 summarizes the price quotes by residential or commercial property sector. The overall quote is $20.7 trillion. Measurement concerns with the underlying information suggest that the actual value of total CRE may differ from this point estimate. An evaluation of these sources of unpredictability recommends that the real value is highly likely to fall within a range of $18 - $22 trillion. These estimates are based on a bottom-up technique utilizing the best [offered data](https://montenegrohomeplus.me) for each residential or commercial property sector. 
 We likewise estimate total REIT holdings of industrial property utilizing information from Capital IQ Pro. For the 2nd quarter of 2021, REITs make up an estimated 9.4% of the overall CRE market. REITs tend to concentrate on institutional-quality residential or commercial properties that are newer and of higher quality than numerous other business residential or [commercial](https://bytyrohatec.cz) properties that are owned by personal financiers. We estimate the total value of these "REIT-like" residential or commercial properties to be approximately 50% of the total CRE market which the REIT share of "REIT-like" residential or commercial properties is 18.7% for the 2nd quarter of 2021. 
 Chart 1 reveals a time series of the REIT share of the overall CRE market and the REIT share of the REIT-like CRE market. 
 Methodology 
 To approximate the size of the commercial realty market, we use a multi-step method based upon the finest readily available data for each residential or commercial property sector. 
 - We start by identifying and approximating the number of systems (for multifamily) and overall square footage (for other residential or commercial property sectors) by residential or commercial property sector and residential or [commercial property](https://ferninnholidays.com) quality type for the biggest 200 markets in the U.S. This process used CoStar's information covering the Office, Retail, Multifamily, and Industrial residential or commercial property sectors that supplied overall [square footage](https://boldhillzproperties.com.ng) and units along with the [average](https://www.visualizaweb.com.br) price per square foot (for office, retail, and industrial) or per unit (for multifamily).
- The information on square footage and typical price by residential or commercial property type (for retail: General Retail, Mall, Neighborhood Center, and Strip Center; for commercial: Flex, Logistics, and Specialized), CoStar quality rating (1-2 Star, 3 Star, 4-5 Star), and groups of city areas (entrance cities, next largest 48 metro locations, and all other city areas) enable more analysis of the geographical distribution of [industrial](https://101properties.in) realty across the country and estimates of institutional-grade industrial genuine estate versus all other. These quotes in turn are helpful for calculating the REIT share of industrial real estate by residential or commercial property sector.
- To estimate worths for the Healthcare and [Hospitality sectors](https://turk.house) where we do not have disaggregated overalls readily available from CoStar, we use the worths from an aggregate analysis of commercial property market size carried out by CoStar, updated utilizing aggregate development rate assumptions.
- To estimate the worth of Data Centers and Towers, we estimate the total worth of REITs in these residential or commercial property sectors and earn up to cover the whole market using assumptions on the REIT portion of these sectors (50% for Data Centers and 75% for Towers). Recent [Nareit-sponsored](https://pms-servicedapartments.com) research study on cell tower REITs highlights their importance in the CRE market. The computed value for Data Centers is subtracted from the Industrial total, as it is consisted of in the CoStar estimate of overall square video footage of Industrial residential or commercial properties.
- We estimate the REIT share of the business realty market by using information from S&P Capital IQ Pro on the Real Estate Value of REITs. We include up the overall Property Value for the most current quarter and divide by the overall worth of the CRE market.
- To develop a time series for REIT share, we use observed data on the total size of the CRE market since 2012. For many years before 2012, we assume an 8% growth in overall worth for each year going back to 1995. For the years 2007 - 2011, we follow various conventions to represent the results of the Great Financial Crisis. In 2007, we estimate that the overall CRE value decreased the very same percent as REITs. This percent decline is the very same for both parts in 2008. In 2009 - 2011, both the total market and the REIT values increase to 1/4, 1/2, and 3/4 of the method to the 2012 worth, respectively.
- In addition to estimating the REIT share of the overall market, we also approximate the [REIT share](https://katbe.com) of 'REIT-like residential or commercial properties.' REITs do not own many older, lower quality, or smaller sized residential or commercial properties that are owned by private financiers. Therefore, we estimate that half of the overall market is "REIT-like" residential or commercial properties and we divided the REIT value by that number to approximate the REIT share of "REIT-like" residential or commercial properties.