by Brianna Crandall — February 23, 2015—The Building Owners and Managers Association (BOMA) International recently released a report that details the impact of commercial office space on the national and local economies. The report, first published in 2009, shows that the short- and long-term expenditures that sustain office building operations—management, maintenance, repairs, building services and utilities—generate significant, continuous and growing expenditures that support local businesses, create job demand, and contribute significantly to the U.S. gross domestic product (GDP).
The new study finds that the 10.4 billion square feet of commercial office space located within the markets served by BOMA International’s local associations generated $82.4 billion in direct operating expenditures in 2013 to the benefit of workers and businesses within their host jurisdictions.
Commercial real estate also is one of the leading employers in the United States. BOMA reminds that firms in the CRE industry employ building managers, asset managers, custodial staff, security staff, brokers and accountants, and they retain a myriad of other services through contract, such as legal consulting, landscape maintenance and window cleaning, just to name a few.
“While the construction of new office buildings is often noted as providing important economic benefits, once this construction is completed and these new buildings are occupied, the economic benefits of their operations continue for the life of the building,” explained the author of the report, Stephen S. Fuller, Ph.D., Dwight Schar faculty chair and university professor and the director of the Center for Regional Analysis at George Mason University.
“Beyond a continuing source of jobs and income related to these buildings’ operations, the buildings themselves house much of today’s modern economy; that is, the professional and business service workers who represent the largest share of the nation’s GDP,” continued Fuller. “The nation’s office building inventory is, in fact, where the work of the national economy is being done.”
Other significant findings detailed in the study include:
- For every dollar spent on office building operations, the national economy gained $2.76, with the result that $82.4 billion in annual operating expenditures contributed a total of $227.6 billion to the gross domestic product (GDP) in 2013—roughly twice the annual contribution made by pharmaceutical or automotive-industry research and development annually.
- For each dollar spent on office building operations, workers in the U.S. realized an increase of $0.87 in personal earnings, generating a total of $71.7 billion in new earnings for workers residing within these office market areas and respective state economies in 2013.
- $82.4 billion in annual operating expenditures supported more than 1.8 million direct, indirect and induced jobs across all sectors of the national economy, with 31.8 percent of these jobs being directly related to the operations of office space.
- The 10.4 billion square feet of commercial and government-owned office space located in the markets served by BOMA’s local associations provided workspace for an estimated 46.6 million office jobs—a number larger than the population of California.
The analysis included all office buildings, inclusive of tenant-occupied buildings, buildings owned by their occupants, and government-owned office buildings. The report also delves into the economic impact of office building operations in the markets served by each of BOMA International’s local associations.
Where America Goes to Work: The Contribution of Office Building Operations to the Economy, 2014 is available for download from the BOMA Web site. The launch page includes an interactive U.S. map that shows how the CRE industry influences specific local markets.