Lessors of Nonresidential Buildings NAICS 531120

        Lessors of Nonresidential Buildings

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Purchase Report

Industry Summary

The 31,300 firms in the US act as lessors of nonresidential buildings, such as office buildings, shopping centers, and retail stores. The industry includes owner-lessors and firms that rent real estate and subsequently sublet property to others. Professional and office buildings account for about 36% of sales; commercial property, which includes shopping centers and retail stores, account for about 36%; and manufacturing and industrial buildings 8%. Firms may manage properties or outsource management to a third party.

Competition for Desirable Locations

The location of properties is a primary factor that determines rental rates, and properties in sought-after areas are priced at a premium.

Capital-Intensive, Debt Heavy

The nonresidential lessor industry is capital intensive, and firms typically have sizeable investments in real estate holdings.


Recent Developments

Aug 18, 2025 - Most Office Occupiers Plan to Increase Space
  • About two-thirds of office users plan to increase their square footage over the next three years, according to CBRE’s 2025 Americas Office Occupier Sentiment Survey. One-third of firms surveyed said they plan to reduce their office footprints over the next three years. However, company size tends to dictate the likelihood of expanding or contracting office use. In 2025, 95% of smaller firms planned to increase their office usage, compared to just 85% in 2024. About 60% of companies with 10,000 employees or more said they plan to reduce square footage over the next three years. Industry insiders suggest that firms seeking to reduce expenses are doing so by rightsizing their office occupancy, not by downgrading to lower-quality space.
  • CBL Properties’ $178.9 million acquisition of four mid-tier malls signals a broader recovery in the mall sector beyond luxury properties, according to The Wall Street Journal. After emerging from bankruptcy and shedding 20 malls pre-pandemic, CBL is doubling down on dominant, regionally focused enclosed centers. The deal reflects renewed interest in middle-market malls, driven by limited new retail construction and rising demand for space. While high-end mall owners like Simon and Brookfield continue investing in upscale renovations, CBL is revitalizing its properties by replacing department stores and tailoring offerings to local markets. Industry leaders now see select mid-tier malls as long-term “keepers,” suggesting that the mall renaissance is not confined to luxury-focused assets. With open-air retail vacancies near historic lows, even second-tier malls are attracting expanding retailers and generating stronger returns.
  • Fitch Ratings’ US CMBS delinquency rate rose by six basis points to 3.16% in July 2025 from 3.10% in June. The July rise was driven by an increase in new office and multifamily delinquencies, which outstripped increased resolution activity and new issuance. Commercial mortgage-backed securities (CMBS) are fixed-income investment products backed by mortgages on commercial properties rather than residential real estate. The delinquency rate is the percentage of commercial real estate loans that were 30 or more days past due or in foreclosure. A rising delinquency rate indicates that an increasing number of commercial property owners cannot pay the mortgages on those properties. Current and prior-month delinquency rates for July and June were: Office: 8.0% (from 7.96% in June); Retail: 3.82% (from 3.48%); Hotel: 3.41% (from 3.39%); Multifamily: 1.09% (from 0.93%); Industrial: 0.47% (from 0.65%); Mixed Use: 4.65% (from 4.40%); Self-storage: 0.14% (from 0.08%); and Other: 1.13% (from 0.99%).
  • Amid increased conversions and demolitions, the US supply of office space is on pace to shrink this year for the first time in 25 years, according to real estate services firm CBRE and reporting by The Wall Street Journal. The shift marks a break in a years-long office space glut as federal tax breaks, low interest rates, and unprofitable start-ups fueled office overdevelopment. Matters were made worse as the pandemic reduced demand further. Converting unused offices into residential space seemed like an obvious solution, but until recently, such projects were unprofitable. However, lower property values, local government incentives, and zoning law changes are making conversions practical. While conversions will not reduce office supplies significantly in the short term, they are revitalizing some urban areas by bringing in new residents, which spurs other business development, including entertainment and shopping.

Industry Revenue

Lessors of Nonresidential Buildings


Industry Structure

Industry size & Structure

The average nonresidential lessor operates out of a single location, employs about 5 workers and generates about $5 million annually.

    • The nonresidential lessor industry consists of about 31,300 firms that employ 159,900 workers and generate $155.1 billion annually.
    • The industry is concentrated at the top and fragmented at the bottom. The 50 largest firms account for 45% of industry sales. Large firms may operate as real estate investment trusts (REIT) and have properties in foreign countries.
    • While commercial space is concentrated in large buildings, large buildings account for a relatively small number of the overall stock of commercial buildings, according to the National Association of Realtors (NAR). The majority of buildings are relatively small.
    • Large firms with nonresidential lessor business include Prologis, Simon Property Group, LaSalle Investment Management, and Brookfield Property Partners. The largest firms are fully integrated, own and develop land and buildings, and provide leasing, management, and construction services.

                                    Industry Forecast

                                    Industry Forecast
                                    Lessors of Nonresidential Buildings Industry Growth
                                    Source: Vertical IQ and Inforum

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