Real Estate, Rental & Leasing

Performance Highlights

The industry experienced growth due to low interest rates from 2019 to 2021, which propped up downstream demand. High interest rates since 2022 have hampered demand, particularly in the real estate subsector. The performance of the real estate subsector is crucial to the overall sector's performance, with consumers being the key market for real estate.

Geographic Distribution

The highest concentrations of businesses are in California, Texas, Florida, and New York, driven by large populations and economic activity. The West, particularly California, is an ideal location for industry operators due to its massive population.

Industry Outlook

Revenue is expected to grow at a CAGR of 1.5% from 2024 to 2029, reaching $1.5 trillion. Interest rate cuts anticipated in 2024 will provide relief to the real estate subsector and boost demand for real estate from both consumers and businesses. Construction activity is expected to increase, benefiting rental and leasing operators.

Competitive Forces

The industry is characterized by low concentration and moderate competition. Barriers to entry are low, but the sector requires significant capital and skilled labor. Successful businesses focus on location, quality of assets, and technology integration.

Major Companies

Notable players include United Rentals, Inc. (0.6% market share), Avis Budget Group, Inc. (0.6% market share), Realogy Holdings Corp. (0.5% market share), and CBRE Group, Inc. (0.2% market share).

Revenue

$1.4 trillion

Employees

6 million

Businesses

4 million

Wages

$244.5 billion

Economic and External Factors

High interest rates have caused volatility, making it more costly for consumers and businesses to purchase property. Regulations for companies change by state, and most real estate companies are subject to Real Estate Investment Trusts (REITs) tax laws.