Midyear Economic Impacts of COVID-19 on the Commercial Real Estate Development Industry
By: Stephen S. Fuller, Ph.D.
The NAIOP Research Foundation commissioned Steve Fuller, Ph.D., professor emeritus at George Mason University, to undertake a study of the 2020 mid-year economy and how second quarter shocks may influence commercial real estate development in the future.
Fuller found, according to government and private-sector data, declines in expenditures and value across most building types, specifically:
- Construction expenditures and building activity for office, industrial (excluding warehouse) and retail buildings declined 23.4% from midyear 2019 to midyear 2020.
- For the same period, the value of nonresidential construction put in place was down 23.2%.
- Fuller estimated that the value of nonresidential construction put in place for all of 2020 will decline by 18.1% from 2019.
Government officials, elected representatives and professionals should be aware of the critical contributions of construction and real estate development in strengthening and advancing the economy. Supporting construction activity through public policy, creating a positive business climate, and enabling governments to accelerate project approval processes will further boost affected economies and contribute to a broader economic recovery.