From the Editor: CRE Remains a Crucial Part of the Economy

Spring 2023 Issue
By: Jennifer LeFurgy, Ph.D.

Jennifer LeFurgy

Although the industry will undoubtedly face challenges this year, particularly in the office sector, commercial real estate will continue to be a major economic engine in North American economies. Last year, in the U.S. alone, the development and operations of commercial buildings contributed $2.3 trillion to U.S. GDP, generated $831.8 billion in personal earnings and supported 15.1 million jobs.

Real estate development doesn’t occur in isolation — we can all learn and prosper from each other’s experiences.

To this end, Development will be offering more Mexican and Canadian content. In this issue, Kat Grimsley, the NAIOP/Thomas J. Bisacquino Distinguished Fellow, and professor Héctor Salazar Sánchez write on the current state of Mexican industrial development. Additionally, MG2 describes its experience designing a Costco to fit seamlessly underneath a public park in a neighborhood of Mexico City.

Stay connected,
Jennifer LeFurgy, Ph.D.

In Brief

Notable facts and figures on the state of the commercial real estate industry, culled from media reports and other sources.



The percentage of commercial real estate leaders who are optimistic about the industry in 2023, according to JPMorgan Chase & Co’s 2023 Business Leaders Outlook survey. Additionally, “almost half of real estate leaders are optimistic about the global (44%) and national economy (46%),” according to the survey. It’s not all roses, though — 55% expect a recession in 2023, and 67% of respondents said rising interest rates and the growing cost of capital are increasing their business costs.

$175 Billion

The amount of real estate credit that is already distressed, according to data compiled by Bloomberg for an article that was published in January. “As the toll from higher interest rates and the end of easy money mounts, many real estate markets are almost frozen with some lenders telling borrowers to sell assets or risk foreclosure amid demands for additional capital from landlords,” the article notes.

$20 Billion

The amount of money that institutional investors asked to withdraw from property funds in 2022, according to IDR Investment Management. “It’s like the nightclub where everybody lines up to get in and then lines up to leave when it closes,” John Murray, head of global private commercial real estate at Pacific Investment Management Co., told Bloomberg.



The office vacancy rate in Washington, D.C., in the fourth quarter of 2022, according to Cushman & Wakefield research. That’s a record number, and it reflects “the federal government’s overall unwillingness to return en masse (to the office),” Nathan Edwards, senior research director at Cushman & Wakefield, told the Wall Street Journal in January.


The number of office buildings in the U.S. that were converted to other uses between 2016 and 2021, according to CBRE. About 40% of the conversions were to multifamily, which created 13,420 apartments. In 2022, there were 42 office conversions completed, according to a report in the New York Times.

9.5 Million

The number of square feet of office space in Manhattan’s “commodity buildings” (Class B and C) that was three-quarters rented in 2022, according to data from CBRE. A December 2022 analysis by Commercial Observer notes that “the market is on the verge of breaking the 10.2 million square-foot post-pandemic high set last year and challenging the 16.9 million square feet rented in 2019,” which was one of the best years ever in Manhattan, according to Michael Slattery, a research manager with CBRE.


415 Million

The amount of industrial square footage delivered in 2022, according to research from Matthews Real Estate Investment Services. “The big question moving into 2023 is has industrial hit its peak? The short answer is probably not,” Alexander Harrold, Matthews’ senior vice president and senior director wrote in the firm’s “End of Year 2022 Industrial Market Report.” “The looming recession and difficult lending environment will impact the sector, but the last two years of record growth and performance will prop up industrial during challenging times.”



The decline in the number of TEUs (20-foot equivalent units) handled at the ports of Los Angeles and Long Beach from November 2021 to November 2022. According to a December 2022 report from the Wall Street Journal, “that is the lowest level since March 2020, when the COVID-19 pandemic stifled global trade.” Imports at the ports have been below pre-pandemic levels since September, according to the newspaper.

Most Popular From Winter 2022/2023

  1. "Aging Office Buildings Are Having a Midlife Crisis” 
  2. "How E-Commerce Affects Urban Industrial Lands and Transportation Systems” 
  3. "What Lies Ahead for Commercial Real Estate?” 
  4. "What the Widening Talent Gap Means for Today’s Business Leaders” 
  5. "From Broker to Developer: The Challenges (and Rewards) of a Major Career Transition” 

Future NAIOP Events

  • National Forums Symposium, May 17-19, Boston
  • I.CON East 2023, June 7-8, Jersey City, New Jersey
  • CRE.Converge, October 18-20, Seattle

For the most current information on upcoming NAIOP events, both virtual and in-person, visit


In New & Noteworthy in the Winter 2022-23 issue, the name of the developer of the Seaport 16 Trade Center on page 13, Rooker, was misspelled. Also, the Peoria Logistics Park on page 17 is in Arizona, not Illinois. Additionally, the name of Watershed Development Group’s project on page 19, Sixth and Chicon, was misspelled.