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NJ Ranks No. 10 in CRE Economic Impact

Garden State Moves Up in Annual NAIOP Report
February 28, 2018
New Jersey cracked the list of Top 10 states for commercial real estate development for 2017, according to a report released Wednesday by NAIOP.

The Garden State ranked No. 10 in the study, with its commercial real estate industry contributing $10.71 billion to New Jersey’s Gross Domestic Product and creating and supporting 62,381 jobs across the industry.

New Jersey moved up from its No. 12 position in 2016, a year when Ohio was No. 11 on the list and Massachusetts was ranked 10th, the position that the Garden State now occupies, according to NAIOP.

The 2017 report ranks Texas No. 1 in terms of commercial real estate development’s economic impact, contributing $58.9 billion to the GDP and creating 379,781 jobs. California, Pennsylvania, New York and Florida round out the Top 5.

Ranking six through nine right ahead of New Jersey, according to the report, were: Georgia, Illinois, Louisiana, and North Carolina.

Direct construction spending in New Jersey was $5.14 billion, according to NAIOP.

In the warehouse/flex category, which includes e-commerce distribution and fulfillment facilities, New Jersey ranked No. 4. And in the retail sector, New Jersey was No. 9, according to the report.

"The importance of commercial 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," NAIOP President and CEO Thomas Bisacquino said in a statement. "Commercial real estate is a robust contributor to national and state economies, and NAIOP is dedicated to working with the administration, Congress and state legislators to develop bipartisan infrastructure investment incentives that empower our industry to expand."

On the national level, new development and ongoing operations of commercial real estate - office, industrial, warehouse and retail - supported 7.6 million new and existing American jobs and contributed $935.1 billion to the U.S. GDP last year. Also in 2017, construction of 524 million square feet of office, retail, warehouse and industrial space started, which is enough capacity to house more than 1.3 million new workers.

A key to the economy’s growth last year was the strength of the construction sector, according to NAIOP. Overall, hard construction spending for the four building categories included in the report totaled $98.6 billion, which translates to a $15.6 billion, or an 18.9-percent increase, from 2016.

The report also identified a handful of factors that it projects will impact economic growth this year, including interest-rate increases, labor shortages in key sectors such as construction, and the impact of this year’s tax changes on consumer spending and corporate investment.

The NAIOP Research Foundation publishes the annual study, "Economic Impacts of Commercial Real Estate," to measure and provide data on contributions to the GDP and jobs created and supported by the industry.

Linda Moss, Northern New Jersey Market Reporter  CoStar Group   
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