by Dan Rafter
How important is the commercial real estate industry to the U.S. economy? How about 6 million jobs and more than $800 billion worth of importance?
The NAIOP Research Foundation recently published its annual study on the economic impact of the commercial real estate business. Researchers found that the development, construction and ongoing operations of new commercial real estate in the United States supported 6.25 million jobs and contributed $861 billion to the U.S. GDP last year.
Those numbers are impressive, but they’re not surprising considering the busy year commercial real estate developers had in 2016. According to the NAIOP report, developers built 410 million square feet of office, retail, warehouse and industrial buildings last year. These buildings have the capacity to house 1 million new workers with a total estimated payroll of $57.6 billion.
“The importance of commercial development to the U.S. economy is well established, and the industry’s growth is critical to creating new jobs, improving infrastructure, and creating places to work, shop and play,” said Thomas Bisacquino, NAIOP president and chief executive officer, in a written statement.
The construction sector enjoyed a particularly strong year in 2016. The NAIOP reports that construction spending has increased every year since 2011, seeing a rise of 48.7 percent from 2011 through October of 2016. Total construction spending was up 3.4 percent for the fiscal year that ended in October of 2016.
According to the association’s report, office construction spending hit $36.6 billion in 2016, an increase of 28.7 percent from 2015. Retail construction expenditures came out to $17.2 billion in 2016, a decrease of 7 percent from the previous year. And warehouse construction totaled $13.6 billion last year, a sixth consecutive year of increasing expenditures. Warehouse expenditures jumped 12.7 percent when compared to 2015.