Evaluating economic impacts of corporate real estate activities

Abstract

PurposeInput‐output modeling can accurately forecast the benefits associated with corporate real estate projects. This paper aims to address the economic and employment impact analysis practices used in input‐output modeling and identifies resources for corporate real estate executives when working with community groups and public officials. By understanding this topic, corporate real estate executives can more effectively demonstrate the value of corporate activities to a community. An impact analysis case study is presented that includes an example of economic impact report content. Input‐output modeling is an effective analytical tool for corporate real estate site selection, facilities expansion, and other community relations projects. This study addresses the major issues in corporate/community relationships and focuses on the corporate need to demonstrate project contributions to community economic vitality. As political, special interest, and public views about business expansion and development harden, corporate real estate executives and specialists need to utilize effective tools to balance the debate.Design/methodology/approachThis study presents a review of input‐output economic modeling techniques, application of the model, key terms, a case study of a $2.1 billion expansion project, and a sample outline of an impact analysis report. This approach provides a good conceptual framework, terms, and the application of an economic and employment impact approach to measuring the total contribution of corporate real estate activities in a community or region.FindingsDemonstrates methods measuring economic and employment multipliers resulting from direct, indirect, and induced corporate project impacts. The findings will assist professionals responsible for corporate/community relations by enhancing their understanding of economic impacts.Originality/valueThis paper presents an overview of an effective modeling technique that can be used to accurately estimate the community economic and employment contributions resulting from a new corporate real estate project. Emerging corporate/community relations issues are discussed and resources are identified.