Estimating the Size of the Commercial Real Estate Market in The U.S. (#1) · Issues · Donette Braswell / nextspacehomes

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

homes.com
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 overall dollar value of commercial real estate was $20.7 trillion as of 2021: Q2.

Highlights

This research study note summarizes a study by Nareit primarily using data from CoStar that approximates the total dollar value of commercial genuine estate was $20.7 trillion as of 2021: Q2. This study updates and builds upon the methodology for Nareit's previous quotes of the commercial realty market.

Table 1 sums up the quotes by residential or commercial property sector. The total quote is $20.7 trillion. Measurement issues with the underlying data suggest that the actual worth of overall CRE might differ from this point estimate. An examination of these sources of unpredictability recommends that the real worth is extremely most likely to fall within a series of $18 - $22 trillion. These are based on a bottom-up method utilizing the very best offered information for each residential or commercial property sector.

We likewise approximate overall REIT holdings of commercial genuine estate using information from Capital IQ Pro. For the 2nd 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 higher quality than lots of other business residential or commercial properties that are owned by personal investors. We approximate the total worth 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 second quarter of 2021.

Chart 1 shows a time series of the REIT share of the total CRE market and the REIT share of the REIT-like CRE market.

Methodology
wikipedia.org
To approximate the size of the business genuine estate market, we use a multi-step method based upon the best available data for each residential or commercial property sector.

- We begin by identifying and approximating the variety of systems (for multifamily) and total 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 used CoStar's data export function covering the Office, Retail, Multifamily, and Industrial residential or commercial property sectors that supplied overall square video footage and units along with the average price per square foot (for office, retail, and industrial) or per unit (for multifamily).

The information on square video footage and typical price by residential or commercial property type (for retail: General Retail, Mall, Neighborhood Center, and Strip Center; for industrial: Flex, Logistics, and Specialized), CoStar quality score (1-2 Star, 3 Star, 4-5 Star), and groups of metro areas (gateway cities, next biggest 48 metro areas, and all other metro locations) permit for further analysis of the geographical distribution of business realty across the nation and quotes of institutional-grade commercial real estate versus all other. These quotes in turn are helpful 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 offered from CoStar, we use the worths from an aggregate analysis of commercial realty market size carried out by CoStar, updated using aggregate development rate assumptions.
To estimate the value of Data Centers and Towers, we approximate the total worth of REITs in these residential or commercial property sectors and earn approximately cover the whole market utilizing assumptions 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 computed value for Data Centers is deducted from the Industrial overall, as it is included in the CoStar quote of total square footage of Industrial residential or commercial properties.
We estimate the REIT share of the commercial property market by using information from S&P Capital IQ Pro on the Real Estate Value of REITs. We add up the total Property Value for the most current quarter and divide by the overall worth of the CRE market.
To develop a time series for REIT share, we utilize observed data on the total size of the CRE market since 2012. For several years before 2012, we presume an 8% development in total value for each year going back to 1995. For the years 2007 - 2011, we follow various conventions to account for the results of the Great Financial Crisis. In 2007, we estimate that the total CRE value declined the exact same percent as REITs. This percent decline is the exact same for both elements 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 overall market, we also approximate 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 personal financiers. Therefore, we estimate that half of the total market is "REIT-like" residential or commercial properties and we divided the REIT worth by that number to approximate the REIT share of "REIT-like" residential or commercial properties.

[homes.com](http://www.homes.com/condos-for-sale) Estimating the Size of the Commercial Real [Estate Market](https://rahumiworld.com) in the U.S. 
 1. Home
2. REIT Data
3. Research
4. Nareit Research 
 The approximated overall dollar value of commercial real estate was $20.7 trillion as of 2021: Q2. 
 Highlights 
 This research study note [summarizes](https://gornitsahotel.ru) a study by Nareit primarily using data from CoStar that approximates the total dollar value of commercial genuine estate was $20.7 trillion as of 2021: Q2. This study updates and builds upon the methodology for Nareit's previous quotes of the commercial realty market. 
 Table 1 sums up the quotes by residential or commercial property sector. The total quote is $20.7 trillion. Measurement issues with the underlying data suggest that the actual worth of overall CRE might differ from this point estimate. An examination of these sources of unpredictability recommends that the real worth is extremely most likely to fall within a series of $18 - $22 trillion. These are based on a bottom-up method utilizing the very best offered information for each residential or commercial property sector. 
 We likewise approximate overall REIT holdings of commercial genuine estate using information from Capital IQ Pro. For the 2nd quarter of 2021, REITs make up an estimated 9.4% of the total [CRE market](https://nadusrealestate.com). REITs tend to focus on institutional-quality residential or commercial properties that are more recent and of higher quality than lots of other business residential or commercial properties that are owned by personal investors. We approximate the total worth 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://meza-realestate.com) is 18.7% for the second quarter of 2021. 
 Chart 1 shows a time series of the REIT share of the total CRE market and the REIT share of the REIT-like CRE market. 
 Methodology [wikipedia.org](http://en.m.wikipedia.org/wiki/Condominium)
 To approximate the size of the business genuine estate market, we use a multi-step method based upon the best available data for each residential or commercial property sector. 
 - We begin by identifying and approximating the variety of systems (for multifamily) and total 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 used CoStar's data export function covering the Office, Retail, Multifamily, and Industrial residential or commercial property sectors that supplied overall square video footage and units along with the average price per square foot (for office, retail, and industrial) or per unit (for multifamily).
- The information on [square video](https://9bricksrealty.com) footage and typical price by residential or commercial property type (for retail: General Retail, Mall, Neighborhood Center, and Strip Center; for industrial: Flex, Logistics, and Specialized), CoStar quality score (1-2 Star, 3 Star, 4-5 Star), and groups of metro areas (gateway cities, next biggest 48 metro areas, and all other metro locations) permit for further analysis of the geographical distribution of business realty across the nation and quotes of institutional-grade commercial real estate versus all other. These quotes in turn are helpful 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 offered from CoStar, we use the worths from an aggregate analysis of [commercial](https://isayrealestate.com) realty market size carried out by CoStar, updated using aggregate development rate assumptions.
- To estimate the value of Data Centers and Towers, we approximate the total worth of REITs in these residential or commercial property sectors and earn approximately cover the whole market utilizing assumptions on the REIT portion of these sectors (50% for [Data Centers](https://rizpropertygroup.com) and 75% for Towers). Recent Nareit-sponsored research study on cell tower REITs highlights their value in the CRE market. The computed value for Data Centers is deducted from the Industrial overall, as it is included in the CoStar quote of total square footage of Industrial residential or commercial properties.
- We estimate the REIT share of the [commercial property](https://freebroker.co) market by using information from S&P Capital IQ Pro on the Real Estate Value of REITs. We add up the total Property Value for the most current quarter and divide by the overall worth of the CRE market.
- To develop a time series for REIT share, we utilize observed data on the total size of the CRE market since 2012. For several years before 2012, we presume an 8% development in total value for each year going back to 1995. For the years 2007 - 2011, we follow various [conventions](https://caneparealty.com) to account for the results of the Great [Financial Crisis](https://www.realchoiceproperty.com). In 2007, we estimate that the total CRE value [declined](https://realhnt.com) the exact same percent as REITs. This percent decline is the exact same for both elements 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 overall market, we also approximate the REIT share of 'REIT-like [residential](http://villabnb.ru) or commercial properties.' REITs do not own lots of older, lower quality, or smaller residential or commercial properties that are owned by personal financiers. Therefore, we estimate that half of the total market is "REIT-like" residential or commercial properties and we divided the REIT worth by that number to approximate the REIT share of "REIT-like" residential or commercial properties.