Real Estate

Real Estate

Brief Excerpt from Industry Overview Chapter:

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).

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 (15%), and commercial space rental and leasing (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.