Estimating the Size of the Commercial Real Estate Market in The U.S. (#6) · Issues · Loreen McIlwraith / lefkada-hotels

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 estimated total dollar value of commercial genuine estate was $20.7 trillion since 2021: Q2.

Highlights
rewindmuseum.com
This research note summarizes a study by Nareit mostly using information from CoStar that estimates the overall dollar worth of commercial realty was $20.7 trillion as of 2021: Q2. This study updates and constructs upon the methodology for Nareit's previous price quotes of the business real estate market.

Table 1 summarizes the quotes by residential or commercial property sector. The overall quote is $20.7 trillion. Measurement issues with the underlying information suggest that the actual value of total CRE may differ from this point estimate. An assessment of these sources of unpredictability recommends that the real value is extremely most likely to fall within a variety of $18 - $22 trillion. These estimates are based on a bottom-up method using the finest readily available data for each residential or commercial property sector.

We also approximate overall REIT holdings of industrial realty using data 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 more recent and of higher quality than many other business residential or commercial properties that are owned by private financiers. We estimate the total worth of these "REIT-like" residential or commercial properties to be roughly 50% of the overall CRE market which the REIT share of "REIT-like" residential or commercial properties is 18.7% for the second 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 estimate the size of the industrial realty market, we utilize a based upon the very best offered information for each residential or commercial property sector.

- We start by determining and estimating the number of units (for multifamily) and overall square video footage (for other residential or commercial property sectors) by residential or commercial property sector and residential or commercial property quality type for the largest 200 markets in the U.S. This process utilized CoStar's data export function covering the Office, Retail, Multifamily, and Industrial residential or commercial property sectors that supplied total square video footage and systems as well as the typical rate per square foot (for workplace, retail, and industrial) or per unit (for multifamily).

The information on square video footage and average 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 score (1-2 Star, 3 Star, 4-5 Star), and groups of metro areas (entrance cities, next biggest 48 metro areas, and all other metro locations) permit for additional analysis of the geographical distribution of commercial property across the country and estimates of institutional-grade business property versus all other. These price quotes in turn are beneficial for calculating the REIT share of business property by residential or commercial property sector.
To estimate worths for the Healthcare and Hospitality sectors where we do not have actually disaggregated overalls available from CoStar, we utilize the values from an aggregate analysis of commercial realty market size performed by CoStar, upgraded utilizing aggregate development rate assumptions.
To approximate the worth of Data Centers and Towers, we estimate the total value of REITs in these residential or commercial property sectors and gross approximately cover the entire market using presumptions 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 value in the CRE market. The calculated value for Data Centers is deducted from the Industrial total, as it is included in the CoStar estimate of total square video footage of Industrial residential or commercial properties.
We estimate the REIT share of the commercial realty market by utilizing information from S&P Capital IQ Pro on the Real Estate Value of REITs. We build up the total Property Value for the most recent quarter and divide by the total worth of the CRE market.
To develop a time series for REIT share, we use observed information on the overall size of the CRE market because 2012. For several years before 2012, we assume an 8% development in total value for each year returning to 1995. For the years 2007 - 2011, we follow different conventions to account for the effects of the Great Financial Crisis. In 2007, we approximate that the total CRE worth declined the very same percent as REITs. This percent decline is the very same for both parts in 2008. In 2009 - 2011, both the overall 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 approximating the REIT share of the total market, we also approximate the REIT share of 'REIT-like residential or commercial properties.' REITs do not own numerous older, lower quality, or smaller 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 estimated total dollar value of commercial genuine estate was $20.7 trillion since 2021: Q2. 
 Highlights [rewindmuseum.com](http://www.rewindmuseum.com/brickphone.htm)
 This research note summarizes a study by Nareit mostly using information from CoStar that estimates the overall dollar worth of commercial realty was $20.7 trillion as of 2021: Q2. This study updates and constructs upon the methodology for Nareit's previous price quotes of the business real estate market. 
 Table 1 summarizes the quotes by residential or commercial property sector. The overall quote is $20.7 trillion. Measurement issues with the underlying information suggest that the actual value of total CRE may differ from this point estimate. An assessment of these [sources](https://aurorahousings.com) of unpredictability recommends that the real value is extremely most likely to fall within a variety of $18 - $22 trillion. These estimates are based on a bottom-up method using the finest readily available data for each [residential](https://remaxjungle.com) or commercial property sector. 
 We also approximate overall REIT holdings of industrial realty using data from Capital IQ Pro. For the 2nd quarter of 2021, REITs make up an estimated 9.4% of the overall [CRE market](https://www.dominicanrepublicrealestate.org). REITs tend to concentrate on institutional-quality residential or commercial properties that are more recent and of higher quality than many other [business residential](https://sherwoodhomesomaha.com) or commercial properties that are owned by private financiers. We estimate the total worth of these "REIT-like" residential or commercial properties to be roughly 50% of the overall CRE market which the REIT share of "REIT-like" residential or commercial properties is 18.7% for the second 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 estimate the size of the industrial realty market, we [utilize](http://mambotours.rs) a based upon the very best offered information for each residential or commercial property sector. 
 - We start by determining and estimating the number of units (for multifamily) and overall square video footage (for other [residential](https://housesites.in) or commercial property sectors) by residential or commercial property sector and residential or commercial property quality type for the largest 200 markets in the U.S. This process utilized CoStar's data export function covering the Office, Retail, Multifamily, and Industrial residential or commercial property sectors that supplied total square video footage and systems as well as the typical rate per square foot (for workplace, retail, and industrial) or per unit (for multifamily).
- The information on square video footage and average 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 score (1-2 Star, 3 Star, 4-5 Star), and groups of metro areas (entrance cities, next biggest 48 metro areas, and all other metro locations) permit for additional analysis of the geographical distribution of commercial property across the country and estimates of institutional-grade business property versus all other. These price quotes in turn are beneficial for calculating the REIT share of business property by residential or commercial property sector.
- To estimate worths for the Healthcare and Hospitality sectors where we do not have actually disaggregated [overalls](https://kopenaandecosta.nl) available from CoStar, we utilize the values from an aggregate analysis of commercial realty market size performed by CoStar, upgraded utilizing aggregate development rate assumptions.
- To approximate the worth of Data Centers and Towers, we estimate the total value of REITs in these residential or [commercial property](https://tsiligirisrealestate.gr) [sectors](https://dominicarealestate767.com) and gross approximately cover the entire market using presumptions 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 value in the CRE market. The calculated value for Data Centers is deducted from the Industrial total, as it is included in the CoStar estimate of total square video footage of [Industrial residential](https://barabikri.com) or commercial properties.
- We estimate the REIT share of the commercial realty market by utilizing information from S&P Capital IQ Pro on the Real Estate Value of REITs. We build up the total Property Value for the most recent quarter and divide by the total worth of the CRE market.
- To develop a time series for REIT share, we use observed information on the overall size of the CRE market because 2012. For several years before 2012, we assume an 8% development in total value for each year returning to 1995. For the years 2007 - 2011, we follow different conventions to account for the effects of the Great Financial Crisis. In 2007, we approximate that the total CRE worth declined the very same percent as REITs. This percent decline is the very same for both parts in 2008. In 2009 - 2011, both the overall 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 approximating the REIT share of the total market, we also approximate the REIT share of 'REIT-like residential or commercial properties.' REITs do not own numerous older, lower quality, or smaller 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.