Real Estate
Description
Companies in this industry buy, rent, or lease real estate, manage residential, commercial, and industrial properties, and provide other real estate related services, including appraisals. Major companies include Anywhere Real Estate, CBRE, Host Hotels & Resorts, and Simon Property Group (all based in the US); as well as Finatis (France), Mitsui Fudosan (Japan), Savills (UK), and Scentre Group (Australia).
The global investment in real estate reached a record annual total of $828 billion in 2024, according to Savills. Q4 volume in the Americas, EMEA, and Asia-Pacific surpassed 2019 levels, with the Americas and EMEA setting record levels.
The US real estate industry includes about 350,000 companies with combined annual revenue of about $470 billion.
COMPETITIVE LANDSCAPE
Demand for real estate is driven by population growth, personal income, employment rates, interest rates, and access to capital. The profitability of individual companies depends on property values and demand, which are both impacted by general economic conditions. Real estate companies also rely on the supply of investment capital. Large companies have competitive advantages based on their financial resources and broad geographic reach. Small companies can compete effectively by focusing on local or regional markets. The US industry is highly fragmented: the top 50 companies account for about 20% of revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products and services include residential space rental and leasing, which includes home, apartment, and rooming houses, accounting for about 25% of the industry's revenue. This is followed by agent and brokerage services (about 20%), property management services (about 15%), and commercial space rental and leasing (about 10%). Other products and services include real estate consulting services. Rental and leasing of nonresidential space, rental and leasing of industrial and manufacturing space, and real estate appraisal services.
Residential real estate includes buildings that are used as dwellings or residences, such as single-family homes, apartment buildings, and town homes. Residential real estate leasing companies may manage properties in addition to leasing residential units to tenants. Residential real estate brokers bring together buyers and sellers of residential properties and assist them with pricing, selling, and purchasing. Some large residential real estate companies offer franchise services and earn revenues from royalty fees. Franchisees pay those fees for the right to operate under company trademarks.
Commercial real estate includes nonresidential buildings such as offices, retail space, health care and laboratory facilities, and industrial properties. Some commercial real estate companies also handle multifamily residential and military housing properties. Commercial real estate leasing companies lease space within commercial buildings and often manage day-to-day operations at the properties. Commercial real estate brokers assist in the buying, selling, and valuation of properties. Some large commercial real estate companies also operate mortgage brokerage businesses that originate, sell, and service commercial mortgage loans.
Companies rely on the skills of their employees. Realtors must obtain a professional license with varying requirements from state to state. Property sales and leasing professionals generate revenues by establishing and maintaining relationships with clients and customers. Many successful real estate professionals establish a reputation as being trustworthy and knowledgeable about a certain region or property type. There are seasonal fluctuations in residential and commercial real estate. Companies tend to earn most of their revenues in the second and third quarters of the year, while the first and fourth quarters of the year are slower.
The global investment in real estate reached a record annual total of $828 billion in 2024, according to Savills. Q4 volume in the Americas, EMEA, and Asia-Pacific surpassed 2019 levels, with the Americas and EMEA setting record levels.
The US real estate industry includes about 350,000 companies with combined annual revenue of about $470 billion.
COMPETITIVE LANDSCAPE
Demand for real estate is driven by population growth, personal income, employment rates, interest rates, and access to capital. The profitability of individual companies depends on property values and demand, which are both impacted by general economic conditions. Real estate companies also rely on the supply of investment capital. Large companies have competitive advantages based on their financial resources and broad geographic reach. Small companies can compete effectively by focusing on local or regional markets. The US industry is highly fragmented: the top 50 companies account for about 20% of revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products and services include residential space rental and leasing, which includes home, apartment, and rooming houses, accounting for about 25% of the industry's revenue. This is followed by agent and brokerage services (about 20%), property management services (about 15%), and commercial space rental and leasing (about 10%). Other products and services include real estate consulting services. Rental and leasing of nonresidential space, rental and leasing of industrial and manufacturing space, and real estate appraisal services.
Residential real estate includes buildings that are used as dwellings or residences, such as single-family homes, apartment buildings, and town homes. Residential real estate leasing companies may manage properties in addition to leasing residential units to tenants. Residential real estate brokers bring together buyers and sellers of residential properties and assist them with pricing, selling, and purchasing. Some large residential real estate companies offer franchise services and earn revenues from royalty fees. Franchisees pay those fees for the right to operate under company trademarks.
Commercial real estate includes nonresidential buildings such as offices, retail space, health care and laboratory facilities, and industrial properties. Some commercial real estate companies also handle multifamily residential and military housing properties. Commercial real estate leasing companies lease space within commercial buildings and often manage day-to-day operations at the properties. Commercial real estate brokers assist in the buying, selling, and valuation of properties. Some large commercial real estate companies also operate mortgage brokerage businesses that originate, sell, and service commercial mortgage loans.
Companies rely on the skills of their employees. Realtors must obtain a professional license with varying requirements from state to state. Property sales and leasing professionals generate revenues by establishing and maintaining relationships with clients and customers. Many successful real estate professionals establish a reputation as being trustworthy and knowledgeable about a certain region or property type. There are seasonal fluctuations in residential and commercial real estate. Companies tend to earn most of their revenues in the second and third quarters of the year, while the first and fourth quarters of the year are slower.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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