Commercial real estate sector adds more than $300 billion to economy

Commercial real estate provided a boost to the U.S. economy.

A new report from the NAIOP Research Foundation revealed the surging commercial real estate sector helped fuel the nation's economy in 2012.

Development and construction of office, industrial and retail buildings produced approximately 2.3 million jobs in 2012, according to the study. Commercial real estate construction also contributed more than $300 billion to the economy, signaling the second year the sector posted gains since 2007.

The more than $300 billion added to the economy was up nearly 16 percent from the $261.6 billion generated in 2011, according to the report.

"These advances and increased projects are paramount to continued growth in the country, as the U.S. economy cannot achieve sustained expansion in the absence of the development industry's full recovery," said Stephen Fuller, an economist and the report's author. Fuller is a professor and director of the Center for Regional Analysis at George Mason University.

Top states for commercial real estate
New York, which ranked second behind Texas in 2010, posted the highest construction values for the development of office, industrial, warehouse and retail space in 2012.

New York spent $4.8 billion and supported 122,600 jobs in the process. Texas dropped to No. 2 on the list with $4.34 billion in spending while it supported 162,877 jobs.

Surprisingly, Iowa, which wasn't ranked among the top 10 in 2010, managed to garner the No. 3 spot ahead of California. Iowa spent $2.92 billion and supported 85,753 jobs in 2012.

California was fourth with $2.88 billion in spending followed by the $2.04 billion Ohio spent in the commercial real estate sector.

Florida, Massachusetts, North Carolina, Illinois and Georgia rounded out the top 10. Ohio and Georgia, like Iowa, were not among the top 10 in 2010.

Still, despite the increases across the board, Thomas Bisacquino, president and CEO of NAIOP, believes the nation is ripe for the commercial real estate sector to continue its boom.

"The commercial real estate industry is improving, yet is being hindered from reaching its full potential," Bisacquino said. "Developers and investors have to be able to anticipate levels of demand three-to-five years ahead, but their vision is clouded because of uncertainty in Washington and in state capitals, which explains the slow pace of recovery."

Bisacquino hopes the industry can avoid vagueness in regards to tax reform and budget policy.

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