Commercial Real Estate and Construction Rebounds
For the first time in years, there’s good news for the development and construction of commercial real estate. According to a recent report by the NAIOP Research Foundation, (NAIOP) gains in development and construction of commercial real estate were up in 2011 – the first time since the recession began in 2007. Experts chimed in that the total economic impact of pre-construction, construction, and post-construction of commercial real estate in 2011 totaled a whopping $261.6 billion to the GDP compared to $231.7 billion in 2010.
The news is a much-needed shot in the arm for the economy, as analysts said construction spending on more than 238.3 million square feet of new space added approximately 610,000 new jobs.
Impacts were felt in numerous areas of the country with Florida ranking seventh in areas of development. NBI co-founder Jayme Nabors said that commercial real estate development on the Emerald Coast is also rebounding with encouraging numbers.
“It’s really picked up with more investors interested in developing office buildings, industrial complexes, warehouses and retail buildings,” Nabors said. “We’ve seen across the board increases, largely driven by private-sector growth that spurred more construction spending.”
The following states posted the highest amounts of direct spending in all three phases of development across all categories of commercial real estate. The number in parenthesis refers to that state’s rank in 2010:
1. Texas (Previous rank: 2), $7.9 billion in spending
2. New York (1), $6.5 billion in spending
3. West Virginia (48), $5.9 billion in spending
4. California (3), $4.5 billion in spending
5. Arizona (14), $4.2 billion in spending
6. Utah (26), $3.6 billion in spending
7. Florida (4), $3.4 billion in spending
8. Illinois (10), $3.0 billion in spending
9. Massachusetts (21), $3.05 billion in spending
10. (tie) North Carolina (7), $3.05 billion in spending
The NAIOP report predicts that construction spending will enjoy more increases in 2013 and 2014 while economists believe it’s a strong sign of a strengthening recovery.
Source: 20120 Florida Realtors