nachi.org
Estimated $26.8 T U.S. CRE investable universe
- Institutional-quality represents $11.7 T (44%).
- Residential sectors dominate.
- Alternative sectors represent over 30%




WHY MEASURE THE INVESTABLE UNIVERSE?

The objective of this analysis is to offer investors with a criteria for the size and scale of the U.S. business property (CRE) market, individual residential or commercial property sectors and the "institutional" quality portion of the marketplace. Up to this point, released quotes on the size of the commercial property investable universe mainly concentrate on country-level global comparisons, taking a top-down method to estimate the size of the total business realty market in each area. Existing literature does little to estimate the worth of particular residential or commercial property types, not to mention alternative residential or commercial property sectors. This report intends to fill this space in the business property information landscape. Focusing specifically on the United States, this report takes a bottom-up method, aggregating estimates for the size of individual commercial property residential or commercial property types to get to a worth for the general business property market. This method permits division between conventional and alternative residential or commercial property types, in addition to the ability to estimate the share of "institutional" property by sector.

Just how huge is the U.S. business real estate market? Although a seemingly uncomplicated concern, approximating the size of the marketplace is challenging for several factors: absence of information and transparency (specifically for smaller, less-liquid and historically tracked residential or commercial property sectors), the widely diverse nature of the series of investible residential or commercial property types, and inconsistent industry definitions/classifications.

This analysis attempts to respond to the concern through a two-step process: initially, approximating the gross possession worth of each residential or commercial property sector despite ownership, occupancy, tenure, size, location, and quality. After arriving at a quote for the overall size of each sector, the 2nd step is to use filters based upon assumptions for developing class, vintage, size and/or market to further narrow the investable universe to only include institutional assets - a subsegment of the investable universe that is restricted to residential or commercial properties that fit the normal requirements of institutional investors.

Sector sizes are approximated using the most reputable personal and public data sources for commercial property offered, while also leveraging the knowledge and insights produced by Clarion and Rosen Consulting Group (RCG)'s experience in the market. For many sectors, the approach to computing the total worth involves approximating the physical size of the sector, be it square video footage, units, spaces, or beds