The impact of new commercial real estate development in the U.S. continues to grow, according to the annual Economic Impacts of Commercial Real Estate research study conducted by the NAIOP Research Foundation. The combined economic contributions of new commercial building development and the operations of existing commercial buildings in 2022 resulted in direct expenditures of $826.9 billion and the following impacts on the U.S. economy:
• Contributed $2.3 trillion to U.S. gross domestic product (GDP).
• Generated $831.8 billion in personal earnings.
• Supported 15.1 million jobs.
Among other highlights:
• Significant (143.4%) increase in non-warehouse (manufacturing) industrial building con- struction in 2022, making it the largest segment of new CRE construction in 2022.
• The four property types covered in the report saw increased construction spending (hard costs) last year.
• With continued remote work, some firms are defensively putting space onto the sublease market, a trend exacerbated by true downsizing and layoffs, which has been especially concentrated in the tech sector.
• Notwithstanding the challenges of office- linked retail in urban-core markets, demand for traditional retail space has rebounded, and over- all occupancy rates have recovered to pre-pandemic levels.
“The construction sector ended 2022 with positive momentum that we hope will continue into the new year,” said Richard Branch, chief economist, Dodge Construction Network, pro- vider of the commercial construction data cited in the report. “As we look ahead, growth in sec- tors such as life sciences, data centers and manu- facturing will be important for seeing the poten- tial amid the economic slowdown in 2023.”
Altogether, commercial, residential, institutional and infrastructure development and operations of existing commercial buildings contributed $6.5 trillion to the U.S. economy and supported 37.7 million jobs in 2022.
“The data in the report are…
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