Brandon Pizzola, economist in EY’s Quantitative Economics and Statistics (QUEST) practice, was a guest on the latest episode of Nareit’s REIT Report podcast. Nareit commissioned EY to estimate the economic contribution of U.S. REITs in 2023, the most recent year of complete information. The data showed that REITs supported an estimated 3.5 million full-time equivalent (FTE) jobs and $278 billion of labor income.
“The one thing to flag is that REITs continue to grow,” Pizzola said. He pointed out that in 2021, the economic footprint of REITs was 3.2 million FTE jobs, with that number growing to 3.4 million in 2022, before rising again in 2023. The data encompasses public listed, public non-listed, and private REITs.
To compile the 2023 data, EY used an economic multiplier of 2.8. That means that every 10 workers at a REIT supported 18 workers elsewhere in the economy, Pizzola said.
The EY data also captures the spillover effect that REIT activity has on the broader economy, such as REITs purchasing goods and services from other businesses, and REIT employees spending their wages. Pizzola noted that the data does not include REIT tenant activity, which would push the number of jobs even higher if it were included.
Given the combination of robust economic growth, labor markets coming into balance, inflation moving closer to the Federal Reserve’s target, and expectations that interest rates will fall 200 basis points over the next 12 months, “I'd expect both REITs and the overall economy to grow over the next year and that this footprint will be bigger next year than it is this year,” Pizzola said.