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1 The U.S. Commercial Real Estate Investable Universe

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

WHY MEASURE THE INVESTABLE UNIVERSE?

The objective of this analysis is to provide financiers with a standard for the size and scale of the U.S. industrial realty (CRE) market, specific residential or commercial property sectors and the "institutional" quality portion of the market. Approximately this point, released estimates on the size of the commercial property investable universe primarily concentrate on country-level worldwide comparisons, taking a top-down method to approximate the size of the overall industrial realty market in each area. Existing literature does little to approximate the value of particular residential or commercial property types, let alone alternative residential or commercial property sectors. This report intends to fill this space in the industrial property info landscape. Focusing specifically on the United States, this report takes a bottom-up technique, aggregating quotes for the size of specific business genuine estate residential or commercial property types to get to a value for the general commercial real estate market. This method permits division between standard and alternative residential or commercial property types, along with the ability to estimate the share of "institutional" real estate by sector.

Just how big is the U.S. business real estate market? Although an apparently straightforward concern, estimating the size of the market is challenging for several reasons: lack of information and openness (specifically for smaller sized, less-liquid and traditionally tracked residential or commercial property sectors), the widely varied nature of the range of investible residential or commercial property types, and inconsistent market definitions/classifications.

This analysis attempts to respond to the question through a two-step procedure: initially, approximating the gross property value of each residential or commercial property sector despite ownership, occupancy, period, size, place, and quality. After coming to a price quote for the total size of each sector, the 2nd step is to apply filters based upon presumptions for building class, vintage, size and/or market to further narrow the investable universe to just consist of institutional properties - a subsegment of the investable universe that is restricted to residential or commercial properties that fit the typical criteria of institutional investors.

Sector sizes are approximated utilizing the most reputable private and public data sources for industrial realty offered, while also leveraging the understanding and insights generated by Clarion and Rosen Consulting Group (RCG)'s experience in the market. For many sectors, the method to computing the general worth involves approximating the physical size of the sector, be it square footage, units, rooms, or beds