Grand opening: Industry expansion is expected to continue as the value of construction increases

The Commercial Real Estate industry comprises a diverse set of operators that specialize in a variety of real estate activities, including brokerage, property and facilities management, research and analytics, consulting, valuation, appraisal, construction and asset management. Commercial real estate markets showed signs of recovery in 2013 and have strengthened since. Over the five years to 2018, the industry has experienced relaxed lending conditions and increasing real estate construction. Amid rising consumer spending, the value of private nonresidential construction increased. Industry expansion is expected to continue over the five years to 2023 as the value of private nonresidential construction increases alongside further consumer spending...purchase to read more.

Industry Statistics & Market Size
Revenue
$1tr
Annual Growth 13-18
4.0%
Forecast Growth 18-23
Profit
Employment
3.8m
Businesses
2.2m
Market Share of Companies
There are no companies with a dominant market share in this industry

Industry Threats & Opportunities

  • As the need for commercial space is aligned with business development and corporate expansion, industry growth will persist
  • Rising wage costs have constrained industry profit margins
  • Interest rates are forecast to increase during the period
  • Industry Report - Industry SWOT Analysis Chapter

    The Commercial Real Estate industry typically fluctuates on a cyclical basis, with annual movements dependent on general economic conditions, employment growth, property values, private investment and rental yields. In the 10 years to 2023, industry value added (a measure of the industry’s contribution to the overall economy) is expected to grow at an annualized rate of 3.3%, while US GDP is forecast to grow at an average annual rate of 2.2% during the same period. This strong growth rate relative to US GDP would typically indicate that the industry exists in its growth phase, but the industry’s growth is uncharacteristically high as a result of drastically increased postrecessionary demand for commercial real estate services...purchase to read more.

    Additional Insights for the Commercial Real Estate Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Commercial Real Estate Industry are

  • Good project management skills
  • Maintenance of excellent customer relations
  • Superior financial management
  • IBISWorld analysts also discuss how external factors such as Value of private nonresidential construction and Consumer spending in the Commercial Real Estate industry impact industry performance..

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    What's in this report

    What is the Commercial Real Estate Industry?

    The Commercial Real Estate industry consists of companies that construct or develop commercial, industrial and multifamily residential property or provide commercial real estate services, including renting, leasing, managing, buying and selling real estate. Other related services, such as appraisals and consulting, are also included. Construction and activities related to utilities and energy, such as power plants or water treatment facilities, are excluded from the industry.

    Industry Products
  • Construction
  • Residential leasing
  • Commercial leasing
  • Sales and brokerage
  • Property and asset management and consulting
  • Other activities
  • Industry Activities
  • Leasing nonresidential buildings, structures and land
  • Leasing mini warehouses and self-storage units
  • Renting nonresidential real estate for others (i.e. agents or brokers)
  • Selling and buying real estate for others (i.e. agents or brokers)
  • Providing property management services
  • Providing real estate appraisal and valuation services
  • Providing real estate asset management services
  • Commercial, industrial, apartment and municipal building construction
  • Providing real estate listing services
  • Providing real estate consulting services
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Value of private nonresidential construction
  • Consumer spending
  • Office rental vacancy
  • Yield on 10-year Treasury note
  • Corporate profit

  • Current Performance
  • Renewed demand, renewed growth
  • Industry landscape
  • Steady growth
  • Chart: Revenue Growth

  • Industry Outlook
  • Investment conditions
  • Strengthening conditions
  • Service convergence
  • Threats and competition
  • Table: Commercial Real Estate Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Commercial Real Estate Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Wholesale Trade
  • Retail Trade
  • Finance and Insurance
  • Law Firms
  • Consumers

  • Key Selling Industries
  • Construction
  • Database & Directory Publishing
  • Information
  • Janitorial Services
  • Law Firms
  • Software Publishing

  • Products & Services
  • Construction
  • Commercial leasing
  • Property and asset management and consulting
  • Residential leasing
  • Other activities
  • Sales and brokerage
  • Chart: Commercial Real Estate Industry Products and Services Segmentation

  • Demand Determinants
  • Office space demand
  • Demand for retail and hotel space
  • Apartment demand
  • Municipal and industrial building demand

  • Major Markets
  • Office
  • Retail
  • Municipal and institutional
  • Residential
  • Industrial
  • Accommodation
  • Chart: Major Market Segmentation for the Commercial Real Estate Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Profit
  • Wages
  • Purchases
  • Other costs
  • Chart: Cost Structure Benchmarking – Sector vs Commercial Real Estate

  • Basis of Competition
    Commercial real estate servicesCommercial and residential leasingConstructionExternal competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Commercial Real Estate Industry

  • Industry Globalization
    There are no major players in this industry. This report includes analysis of other companies.
    Capital Intensity
  • Chart: Level of Capital Intensity for the Commercial Real Estate Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Commercial Real Estate Industry
    Includes:
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)
  • Value of Private Non-residential Construction (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Class A Building
  • A commercial office building that commands the highest rent due to the attractiveness and prestige associated with its location, tenancy, amenities and overall desirability.
  • Leadership In Energy And Environment Design (Leed)
  • An environmental building certificate program established under the US Green Building Council that certifies buildings meet energy-efficiency and green requirements.
  • Real Estate Investment Trust (Reit)
  • A legal entity that uses pooled investor capital to purchase and manage income property or mortgage loans. To qualify as a REIT, the entity must distribute at least 90.0% of taxable income.
  • Vacancy Rate
  • The amount of real estate space unoccupied as a percentage of total available space.
  • What Our Customers Say

    Why buy this report?

    The Commercial Real Estate Industry Research Report measures market size, analyses current and future trends, and provides an indication of market share for the industry’s largest companies. IBISWorld’s collection of industry market research reports gives you insightful, up-to-date information on the supply chains, economic drivers, and key buyers and markets for hundreds of industries.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Commercial Real Estate:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Commercial Real Estate market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Commercial Real Estate, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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