How does one comprehend the above figure? It is a very large number with many zero’s, in fact, it’s so large even a fancy BAII+ financial calculator has to express the number as a exponent of the 10th power (11 * e^12). The name for this sum can vary depending on which country you are in, and unfortunately since the US and Britain saw fit to simply swap the names around, a trillion is 10^12 in the US, and in old english it is considered a billion (a trillion in the old system is 10^18, or a quintillion in the US). Since the definition of this figure does little to aide in the quantification of this figure, it is necessary to use tangible comparisons. 11 trillion dollar bills stacked on top of each other would be 737,000 miles high, in relation the moon is approximately 240,000 miles. Besides the United States and the European Union, 11 trillion dollars surpasses the GDP of every other nation in the world (according to the CIA fact book).
The attempt at quantifying this figure was done in the hopes of imparting the sheer magnitude of this number as well as the mind-boggling size of it, constructing a model that represents data and economic factors that are able to compute the necessary macro and micro forces affecting this figure is simply amazing. This is precisely what researchers at CoStar did in their comprehensive study of the United States commercial real estate market, with their findings and analysis published in the Journal of Real Estate Portfolio Management (JREPM). While this is undoubtably a very exciting study, there has never been a comprehensive valuation of the entire countries real estate, the data collected is far from novel. Having the ability to quantify and value one of the largest asset classes in the world (the only one larger that comes to mind is the US stock exchange at 16 trillion) will allow investors, developers, the government, and anyone else involved in commercial real estate a powerful new model for analyzing the macro effects of economic shifts on the entirety of the asset class. In recognition for their outstanding work, the authors received the best paper of 2010 by The American Real Estate Society (ARES).
The press release from CoStar is below, including a link to read the paper as published in the JREPM.