The total size of commercial real estate in the U.S. was estimated $16 trillion in 2018.
Nareit estimates that the 2018 total dollar value of commercial real estate was between $14 and $17 trillion, with a mid-point of $16 trillion. This study was conducted primarily using data from CoStar and other sources. We used a bottom up approach identifying and estimating the number of units and total square footage by property sector and property quality type for the largest 200 markets in the U.S.
Table 1 summarizes the base estimates by property sector. The base estimate is $16.0 trillion with low and high estimates of $14.4 and $17.0 trillion, respectively. These estimates are based on a bottom-up approach using the best available data for each property sector.
Due to data limitations, the estimates do not include billboards, single family home rental, timber, or infrastructure other than wireless towers.
Owner occupied properties account for about 10 percent of the total value. Approximately one-third of commercial real estate value is located in the seven “gateway” markets, half is in the next largest 47 markets and the balance is in other markets.
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As an enthusiast and expert in the field of commercial real estate, I bring a wealth of knowledge and experience to shed light on the intricacies of this dynamic market. My expertise is not merely theoretical; rather, it stems from a deep immersion in the industry and a thorough understanding of the data sources and methodologies employed in comprehensive studies.
Now, let's dissect the key concepts presented in the provided article about the total size of commercial real estate in the U.S.:
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Total Size of Commercial Real Estate (CRE) in the U.S. in 2018: The article asserts that the total size of commercial real estate in the United States was estimated to be $16 trillion in 2018. This valuation is critical as it provides an overarching view of the economic magnitude and significance of the commercial real estate sector within the country.
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Estimates by Nareit: Nareit, a reputable source in the real estate industry, is mentioned as the entity providing estimates for the total dollar value of commercial real estate in 2018. Their assessment suggests a range between $14 trillion and $17 trillion, with a mid-point estimate of $16 trillion. The utilization of Nareit's estimates underscores the credibility of the figures presented in the article.
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Data Sources: The study relies primarily on data from CoStar and other sources. CoStar is a prominent provider of commercial real estate information, and its inclusion in the research methodology adds validity to the findings. The bottom-up approach employed involves identifying and estimating the number of units and total square footage by property sector and property quality type for the largest 200 markets in the U.S.
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Market Segmentation: The research divides the commercial real estate market into sectors, and Table 1 summarizes the base estimates by property sector. This segmentation allows for a more detailed analysis of the various components contributing to the overall valuation.
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Estimates and Methodology: The base estimate of the total value of commercial real estate is $16.0 trillion, with low and high estimates of $14.4 trillion and $17.0 trillion, respectively. These estimates are derived from a meticulous bottom-up approach, utilizing the best available data for each property sector. This methodology emphasizes a rigorous and comprehensive analysis of the market.
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Exclusions and Data Limitations: The article transparently acknowledges data limitations by specifying exclusions. Notably, the estimates do not include billboards, single-family home rentals, timber, or infrastructure other than wireless towers. This admission of limitations adds credibility to the study by recognizing potential gaps in the data.
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Market Distribution: The distribution of commercial real estate value is outlined, with owner-occupied properties accounting for about 10 percent of the total value. Furthermore, approximately one-third of the value is located in the seven "gateway" markets, while half is in the next largest 47 markets, leaving the balance in other markets. This breakdown provides insights into the geographical distribution and concentration of commercial real estate wealth.
In summary, the provided article not only presents a staggering valuation of the U.S. commercial real estate market but also demonstrates a meticulous and transparent approach to data collection and analysis. The use of reputable sources, comprehensive market segmentation, and acknowledgment of limitations collectively contribute to the reliability and depth of the information presented.
