Estimating the Size of the Commercial Real Estate Market in The U.S. (#21) · Issues · Beatris Mercado / roussepropiedades

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

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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 value of business property was $20.7 trillion as of 2021: Q2.

Highlights

This research study note summarizes a study by Nareit mostly utilizing data from CoStar that approximates the total dollar value of business property was $20.7 trillion since 2021: Q2. This study updates and builds on the approach for Nareit's previous estimates of the business realty market.

Table 1 sums up the price quotes by residential or commercial property sector. The total quote is $20.7 trillion. Measurement problems with the underlying data recommend that the actual value of total CRE may vary from this point quote. An evaluation of these sources of uncertainty recommends that the real value is highly likely to fall within a variety of $18 - $22 trillion. These estimates are based upon a bottom-up method utilizing the best offered information for each residential or commercial property sector.

We also estimate overall REIT holdings of industrial property using information from Capital IQ Pro. For the second quarter of 2021, REITs make up an estimated 9.4% of the total CRE market. REITs tend to focus on institutional-quality residential or commercial properties that are more recent and of greater quality than numerous other business residential or commercial properties that are owned by personal investors. We estimate the overall value of these "REIT-like" residential or commercial properties to be roughly 50% of the overall CRE market and that the REIT share of "REIT-like" residential or commercial properties is 18.7% for the 2nd quarter of 2021.

Chart 1 shows 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 utilize a multi-step technique based upon the best offered information for each residential or commercial property sector.

- We begin by determining and approximating the variety of units (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 procedure utilized CoStar's information export function covering the Office, Retail, Multifamily, and Industrial residential or commercial property sectors that provided total square video footage and systems along with the average price per square foot (for workplace, retail, and commercial) or per system (for multifamily).

The details on square video and typical rate by residential or commercial property type (for retail: General Retail, Mall, Neighborhood Center, and Strip Center; for industrial: Flex, Logistics, and Specialized), CoStar quality ranking (1-2 Star, 3 Star, 4-5 Star), and groups of city areas (gateway cities, next largest 48 city locations, and all other city locations) enable more analysis of the geographic distribution of business property across the country and estimates of institutional-grade commercial realty versus all other. These estimates in turn are useful for determining the REIT share of business realty by residential or commercial property sector.
To approximate values for the Healthcare and Hospitality sectors where we do not have actually readily available from CoStar, we use the values from an aggregate analysis of industrial property market size conducted by CoStar, upgraded utilizing aggregate growth rate presumptions.
To estimate the value of Data Centers and Towers, we approximate the overall value of REITs in these residential or commercial property sectors and earn approximately cover the entire market utilizing presumptions on the REIT percentage of these sectors (50% for Data Centers and 75% for Towers). Recent Nareit-sponsored research study on cell tower REITs highlights their value in the CRE market. The calculated value for Data Centers is subtracted from the Industrial total, as it is consisted of in the CoStar estimate of total square footage of Industrial residential or commercial properties.
We approximate the REIT share of the industrial realty market by utilizing data from S&P Capital IQ Pro on the Real Estate Value of REITs. We build up the overall Property Value for the most current quarter and divide by the overall worth of the CRE market.
To establish a time series for REIT share, we use observed data on the total size of the CRE market given that 2012. For years before 2012, we presume an 8% development in overall value for each year returning to 1995. For the years 2007 - 2011, we follow various conventions to account for the results of the Great Financial Crisis. In 2007, we approximate that the overall CRE worth decreased the very same percent as REITs. This percent decline is the very same for both components in 2008. In 2009 - 2011, both the total market and the REIT worths increase to 1/4, 1/2, and 3/4 of the way to the 2012 value, respectively.
In addition to estimating the REIT share of the overall market, we likewise estimate the REIT share of 'REIT-like residential or commercial properties.' REITs do not own lots of older, lower quality, or smaller residential or commercial properties that are owned by private investors. Therefore, we approximate that half of the overall market is "REIT-like" residential or commercial properties and we divided the REIT value by that number to estimate the REIT share of "REIT-like" residential or commercial properties.

[forummtg.com](https://www.forummtg.com/loan-programs/chicago-reverse-mortgage/) 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 value of business property was $20.7 trillion as of 2021: Q2. 
 Highlights 
 This research study note summarizes a study by Nareit mostly utilizing data from CoStar that approximates the total dollar value of business property was $20.7 trillion since 2021: Q2. This study updates and builds on the approach for Nareit's previous estimates of the business realty market. 
 Table 1 sums up the price quotes by residential or commercial property sector. The total quote is $20.7 trillion. Measurement problems with the underlying data recommend that the actual value of total CRE may vary from this point quote. An evaluation of these sources of uncertainty recommends that the real value is highly likely to fall within a variety of $18 - $22 trillion. These estimates are based upon a bottom-up method utilizing the best offered information for each residential or commercial property sector. 
 We also estimate overall [REIT holdings](https://www.rumahq.id) of industrial property using information from Capital IQ Pro. For the second quarter of 2021, REITs make up an estimated 9.4% of the total [CRE market](https://inngoaholidays.com). [REITs tend](https://laculracilor.ro) to focus on institutional-quality residential or commercial properties that are more recent and of greater quality than numerous other business residential or commercial [properties](https://www.defclarea.org) that are owned by personal investors. We estimate the overall value of these "REIT-like" residential or commercial properties to be roughly 50% of the overall CRE market and that the REIT share of "REIT-like" residential or [commercial properties](https://betnet.et) is 18.7% for the 2nd quarter of 2021. 
 Chart 1 shows a time series of the REIT share of the overall CRE market and the REIT share of the REIT-like [CRE market](https://www.munrorealty.com.au). 
 Methodology 
 To approximate the size of the commercial realty market, we utilize a multi-step technique based upon the best offered information for each residential or commercial property sector. 
 - We begin by determining and [approximating](https://ghurairproperties.com) the variety of units (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 procedure utilized CoStar's information export function covering the Office, Retail, Multifamily, and Industrial residential or commercial property sectors that provided total square video footage and systems along with the average price per square foot (for workplace, retail, and commercial) or per system (for multifamily).
- The details on square video and typical rate by [residential](https://cn.relosh.com) or commercial property type (for retail: General Retail, Mall, Neighborhood Center, and Strip Center; for industrial: Flex, Logistics, and Specialized), CoStar quality ranking (1-2 Star, 3 Star, 4-5 Star), and groups of city areas (gateway cities, next largest 48 city locations, and all other city locations) enable more analysis of the geographic distribution of business property across the country and estimates of institutional-grade commercial realty versus all other. These estimates in turn are useful for determining the REIT share of business realty by residential or commercial property sector.
- To approximate values for the Healthcare and Hospitality sectors where we do not have actually readily available from CoStar, we use the values from an aggregate analysis of industrial property market size conducted by CoStar, upgraded utilizing aggregate growth rate presumptions.
- To estimate the value of Data Centers and Towers, we approximate the overall value of REITs in these residential or commercial property sectors and earn approximately cover the entire market utilizing presumptions on the REIT percentage of these sectors (50% for Data Centers and 75% for Towers). Recent Nareit-sponsored research study on cell tower REITs highlights their value in the CRE market. The calculated value for Data Centers is subtracted from the Industrial total, as it is consisted of in the CoStar estimate of total square footage of Industrial residential or commercial [properties](https://ezestate.net).
- We approximate the REIT share of the industrial realty market by utilizing data from S&P Capital IQ Pro on the Real Estate Value of REITs. We build up the overall Property Value for the most [current quarter](https://www.seasideapartments.co.za) and divide by the overall worth of the [CRE market](https://www.greencastlebnb.com).
- To establish a time series for REIT share, we use observed data on the total size of the CRE market given that 2012. For years before 2012, we presume an 8% development in overall value for each year returning to 1995. For the years 2007 - 2011, we follow various conventions to account for the results of the Great Financial Crisis. In 2007, we approximate that the overall CRE worth decreased the very same percent as REITs. This percent decline is the very same for both components in 2008. In 2009 - 2011, both the total market and the REIT worths increase to 1/4, 1/2, and 3/4 of the way to the 2012 value, respectively.
- In addition to estimating the REIT share of the overall market, we likewise estimate the REIT share of 'REIT-like residential or commercial properties.' REITs do not own lots of older, lower quality, or smaller residential or commercial properties that are owned by private investors. Therefore, we approximate that half of the overall market is "REIT-like" residential or commercial properties and we [divided](https://stayandhomely.com) the REIT value by that number to estimate the REIT share of "REIT-like" residential or commercial properties.