April 19, 2017 (STLRealEstate.News) We often think about what commercial real estate construction can do for business activity and the economy, but do we ever stop to consider what kind of job creation it can contribute to in our country? According to an annual study, Economic Impacts of Commercial Real Estate, by the NAIOP Research Foundation, the development, construction, and ongoing operations within commercial real estate supported 6.25 million American jobs and contributed to $861 billion in the U.S. GDP during 2016 alone.
When broken down further, the report showed that this activity spurred the creation of 410 million square feet of office, retail, warehouse, and industrial properties with the combined capacity to host more than 1 million new workers whose salary, when put together, created $57.6 billion in revenue. Among these states contributing to this turnover, New York led the pack with the highest level of commercial real estate development spending in 2016, at $24.8 billion, followed by Texas at $18.5 billion and California at $14.3 billion.
The report then looked at the different sectors of commercial real estate. It found that office construction expenditures totaled $36.6 billion in 2016, increasing by 28.7 percent from 2015 and warehouse construction totaled $13.6 billion in 2016, registering a sixth consecutive year of increased expenditures. It gained 12.7 percent from the 2015 figure.
Not surprisingly, retail expenditures were down seven percent from 2015, while industrial construction spending also decreased a second year to $15.5 billion – a massive 29.9 percent decrease from 2015.
Thomas Bisacquino of NAIOP went on to state after the report release, “The importance of commercial real estate 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. We look forward to the results for the end of 2017’s growth.”