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    California Commercial Building Market

    ID: MRFR/CO/25863-HCR
    100 Pages
    Tejas Chaudhary
    October 2025

    California Commercial Building Market Research Report By Building Type (Office Buildings, Retail Buildings, Industrial Buildings, Healthcare Facilities, Educational Facilities), By Construction Type (New Construction, Renovations, Retrofits), By Size (Small Buildings (less than 50,000 square feet), Medium Buildings (50,000 to 200,000 square feet), Large Buildings (over 200,000 square feet)), By Application (Commercial Offices, Retail Stores, Industrial Warehouses, Healthcare Facilities, Educational Spaces), By Sustainability Features (LEED C...

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    California Commercial Building Market Infographic
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    California Commercial Building Market Summary

    The California commercial building market is projected to grow from 151.04 USD billion in 2024 to 198.85 USD billion by 2035.

    Key Market Trends & Highlights

    California Commercial Building Key Trends and Highlights

    • The market is expected to experience a compound annual growth rate of 2.53 percent from 2025 to 2035.
    • By 2035, the market valuation is anticipated to reach 198.8 USD billion, indicating robust growth potential.
    • in 2024, the market is valued at 151.04 USD billion, reflecting a solid foundation for future expansion.
    • Growing adoption of sustainable building practices due to increasing environmental regulations is a major market driver.

    Market Size & Forecast

    2024 Market Size 151.04 (USD Billion)
    2035 Market Size 198.85 (USD Billion)
    CAGR (2025-2035) 2.53%

    Major Players

    Apple Inc, DivcoWest, JLL, Alexandria Real Estate Equities, Tishman Speyer, Equity Office Properties Trust, Brookfield Properties, Nuveen Real Estate, Kilroy Realty Corporation, The Swig Company, Prologis, HINES, The Irvine Company, CBRE Global Investors, Harvest Properties

    California Commercial Building Market Trends

    The growth of population, spread of urbanization, and increasing level of industrial activity are key factors responsible for the California commercial building market. The economic performance of the California state, coupled with the conducive business atmosphere, lures more businesses and investments that increase the demand for office, retail, industrial, and mixed-use facilities. Furthermore, emerging trends such as the incorporation of environmentally friendly building concepts in construction and the greater demand for building efficient structures are influencing the direction taken by the market.

    To extend the market share of tenants, which changes rapidly, the developers and investors are looking for ways that will enable their clients to move with the times. One such possibility is sustainable development and construction, hence the growing need in the market for energy-efficient buildings and energy-saving technologies. Other promising areas include the development of technologies for smart buildings and mixed-use construction. It is very observable that there is an increase in the availability of co-location centers for individuals and businesses, which is attributed to the growing trend of flexibility.

    Besides, demand for warehousing facilities and distribution centers has been growing with the expanding e-commerce and online retail. All these trends and predictions will likely continue to have an impact on California’s commercial building market in the next few years to create opportunities for developers and investors who are able to respond to changes in the market environment.

    The California commercial building market is poised for growth, driven by increasing demand for sustainable construction practices and innovative design solutions that align with environmental regulations.

    California Department of General Services

    California Commercial Building Market Drivers

    Urbanization Trends

    Urbanization trends significantly impact the Global California Commercial Building Market Industry. As more people migrate to urban areas, the demand for commercial spaces, including offices, retail, and mixed-use developments, continues to rise. This trend is particularly evident in California's major cities, where population growth drives the need for new commercial infrastructure. The increasing density of urban populations necessitates innovative building designs that maximize space while providing essential services. Consequently, this urban expansion is expected to contribute to the market's growth, aligning with the anticipated market size of 151.0 USD Billion in 2024.

    Technological Advancements

    Technological advancements play a pivotal role in shaping the Global California Commercial Building Market Industry. Innovations such as smart building technologies, automation, and advanced HVAC systems enhance operational efficiency and tenant comfort. These technologies enable building owners to monitor energy consumption in real-time, leading to cost savings and improved sustainability. The integration of Internet of Things (IoT) devices is becoming commonplace, allowing for better management of resources. As these technologies evolve, they are likely to attract investment and drive market growth, with a projected CAGR of 2.53% from 2025 to 2035.

    Market Trends and Projections

    Economic Growth and Investment

    Economic growth and investment are fundamental to the Global California Commercial Building Market Industry. As California's economy expands, businesses seek new commercial spaces to accommodate their growth. This demand is reflected in increased construction activity and investment in commercial real estate. The state's robust economy, driven by technology, entertainment, and tourism, attracts both domestic and foreign investors. This influx of capital is expected to bolster the market, with projections indicating a market size of 151.0 USD Billion in 2024 and a potential increase to 198.8 USD Billion by 2035.

    Sustainable Building Practices

    The Global California Commercial Building Market Industry is increasingly influenced by the adoption of sustainable building practices. As environmental concerns rise, developers are integrating eco-friendly materials and energy-efficient technologies into their projects. This shift not only meets regulatory requirements but also appeals to environmentally conscious tenants. For instance, buildings that achieve LEED certification often command higher rental rates and lower vacancy rates. The market's focus on sustainability is expected to drive growth, contributing to the projected market size of 151.0 USD Billion in 2024 and potentially reaching 198.8 USD Billion by 2035.

    Government Regulations and Incentives

    Government regulations and incentives are crucial drivers of the Global California Commercial Building Market Industry. Policies aimed at reducing carbon emissions and promoting energy efficiency encourage developers to adopt sustainable practices. Incentives such as tax credits for energy-efficient buildings and grants for green renovations stimulate investment in the commercial sector. These regulations not only foster a competitive market but also ensure compliance with environmental standards. As California continues to lead in sustainability initiatives, the market is likely to benefit from these supportive policies, contributing to the expected market growth to 198.8 USD Billion by 2035.

    Market Segment Insights

    California Commercial Building Market Building Type Insights

    The California Commercial Building Market The California Commercial Building Market is segmented by building type into office buildings, retail buildings, industrial buildings, healthcare facilities, and educational facilities. The largest segment of the commercial building market is office buildings, which are expected to account for about 40% of the market revenue in 2023. Office Buildings Office buildings are the largest segment of the California Commercial Building Market.

    Office buildings are expected to account for about 40% of the market revenue in 2023.The growth of the office building segment is driven by the increasing demand for office space in major cities like San Francisco, Los Angeles, and San Diego. The increasing number of startups and the growing technology industry are also contributing to the growth of this segment. Retail Buildings Retail buildings are the second largest segment of the California Commercial Building Market. Retail buildings are expected to account for about 30% of the market revenue in 2023.

    The growth of the retail building segment is driven by the increasing demand for retail space in major shopping malls and retail centers.The growth of e-commerce is also contributing to the growth of this segment. Retailers are increasingly opening up physical stores to complement their online presence. Industrial Buildings Industrial buildings are the third largest segment of the California Commercial Building Market. Industrial buildings are expected to account for about 20% of the market revenue in 2023.

    The growth of the industrial building segment is driven by the increasing demand for industrial space in major industrial hubs like the Inland Empire and the Central Valley.The growth of e-commerce is also contributing to the growth of this segment. Companies are increasingly looking for warehouse space to store and distribute their products. Healthcare Facilities Healthcare facilities are the fourth largest segment of the California Commercial Building Market. Healthcare facilities are expected to account for about 10% of the market revenue in 2023.

    The growth of the healthcare facility segment is driven by the increasing demand for healthcare services in California. The aging population and the rising prevalence of chronic diseases are also contributing to the growth of this segment.Educational Facilities Educational facilities are the fifth largest segment of the California Commercial Building Market. Educational facilities are expected to account for about 10% of the market revenue in 2023. The growth of the educational facility segment is driven by the increasing demand for educational space in California.

    California Commercial Building Market Construction Type Insights

    The California Commercial Building Market is segmented based on Construction Type into New Construction, Renovations, and Retrofits. The New Construction segment accounted for the largest market share in 2023, owing to the increasing demand for new commercial buildings in California due to the growing population and businesses.

    The Renovations segment is expected to witness significant growth over the forecast period due to the rising need for renovation and modernization of existing commercial buildings to meet changing business needs and improve energy efficiency.The Retrofits segment is also expected to grow at a steady pace due to the increasing focus on sustainability and the need to upgrade older buildings to meet current building codes and standards. Overall, the Construction Type segment is expected to contribute significantly to the growth of the California Commercial Building Market in the coming years, with each segment offering unique growth opportunities for market participants.

    California Commercial Building Market Size Insights

    The market is segmented by size into small buildings (less than 50,000 square feet), medium buildings (50,000 to 200,000 square feet), and large buildings (over 200,000 square feet). Small buildings are expected to account for the largest share of the market in 2023, with a revenue of USD 65.0 billion. Medium buildings are expected to grow at a faster rate than small buildings, with a CAGR of 2.7% from 2023 to 2032. Large buildings are expected to grow at the slowest rate, with a CAGR of 2.2% from 2023 to 2032.

    The growth of the California Commercial Building Market is being driven by several factors, including the increasing population of California, the growing demand for office and retail space, and the need for new and renovated buildings to meet the needs of businesses and residents.

    California Commercial Building Market Application Insights

    Application Segment Insight and Overview The California Commercial Building Market is segmented based on application into Commercial Offices, Retail Stores, Industrial Warehouses, Healthcare Facilities, and Educational Spaces. Among these segments, Commercial Offices are expected to hold the largest market share in 2023 due to the increasing demand for modern and efficient workspaces.

    The Retail Stores segment is also expected to witness significant growth, driven by the expansion of e-commerce and the need for physical retail stores to provide an enhanced customer experience.Industrial Warehouses are expected to see steady growth as businesses look to optimize their supply chains and meet the growing demand for goods. Healthcare Facilities are also expected to contribute to the market growth as the healthcare industry continues to expand. Educational Spaces are expected to see a surge in demand as more institutions invest in infrastructure and facilities to meet the needs of a growing student population.

    Overall, the California Commercial Building Market is expected to grow steadily in the coming years, driven by the demand for modern, efficient, and sustainable commercial spaces.

    California Commercial Building Market Sustainability Features Insights

    The California Commercial Building Market is experiencing a surge in demand for sustainability features, driven by increasing environmental consciousness and government regulations. Among the key sustainability features, LEED Certification is gaining significant traction, with buildings aiming for various certification levels, such as LEED Gold and Platinum. Energy-efficient lighting is another prominent trend as commercial buildings seek to reduce energy consumption and operational costs.

    The adoption of solar panels is also on the rise, allowing buildings to generate their own renewable energy and reduce reliance on traditional energy sources.Green building materials, such as recycled content and low-VOC materials, are gaining popularity as they contribute to a healthier indoor environment and reduce the environmental impact of construction. These sustainability features are expected to drive the growth of the California Commercial Building Market in the coming years.

    Get more detailed insights about California Commercial Building Market Research Report — Global Forecast till 2034

    Regional Insights

    The regional market segmentation of the California Commercial Building Market presents a diverse landscape, with each region exhibiting unique characteristics and growth patterns. North America, Europe, and APAC collectively accounted for a significant share of the global market in 2023, with North America holding the largest market size. The growth in these regions is attributed to increasing construction activities, particularly in commercial sectors such as office buildings, retail complexes, and healthcare facilities.

    APAC is projected to witness substantial growth in the coming years, driven by rapid urbanization and economic development in countries like India and China.South America and MEA are emerging markets with growing demand for commercial buildings due to increasing investment in infrastructure and real estate development. The overall growth of the California Commercial Building Market is influenced by factors such as rising population, urbanization, and the increasing adoption of sustainable building practices.

    California Commercial Building Market Regional Insights

    Source: Primary Research, Secondary Research, Market Research Future Database and Analyst Review

    Key Players and Competitive Insights

    The development of the California Commercial Building Market is mostly driven by the acquisition of new projects and historical partnerships with local developers. Leading California Commercial Building Market players are interested in investing their funds in the development of innovative and sustainable buildings. In other words, current trends show that some of the leading players in the market are developing new types of materials and construction technologies for the California Commercial Building Market. The demand for office space, retail space, and residential units is another major driver of the market.

    Thus, leading California Commercial Building Market players aim to increase their market share with the help of providing the rest of the market with innovative and sustainable buildings and attracting new projects as well as providing their customers with value features.The competitive landscape of the California Commercial Building Market is highly fragmented. Specifically, there are dozens of medium and small enterprises working in the parts of the market. At the same time, some of the larger companies, such as Prologis, dominate the California Commercial Building Market.

    Currently, the company has over 100 million square feet of industrial space under management in California. Overall, Prologis aims to dominate the market of California by developing and acquiring high-quality logistics facilities in the most important markets of the state. Today, the company implements innovative and sustainable building and is highly likely to continue its expansion. Another relatively large company, Rexford Industrial Realty, is one of its main competitors in the field of industrial properties in South California.

    Key Companies in the California Commercial Building Market market include

    Industry Developments

    The market growth is primarily driven by the increasing demand for commercial spaces due to the expanding business landscape and population growth in California. The state's strategic location as a global trade and technology hub attracts numerous businesses, contributing to the rising need for office, retail, and industrial spaces. Furthermore, government initiatives aimed at promoting sustainable building practices and energy efficiency are expected to positively impact the market's growth.

    Recent news developments include the launch of green building programs by the California Green Building Standards Code and the growing adoption of smart building technologies by commercial property owners to enhance operational efficiency and occupant comfort.

    Future Outlook

    California Commercial Building Market Future Outlook

    The California Commercial Building Market is projected to grow at a 2.53% CAGR from 2025 to 2035, driven by urbanization, sustainability initiatives, and technological advancements.

    New opportunities lie in:

    • Invest in smart building technologies to enhance energy efficiency and tenant satisfaction.
    • Develop mixed-use properties to cater to evolving consumer preferences and urban living.
    • Leverage green building certifications to attract environmentally conscious tenants and investors.

    By 2035, the California Commercial Building Market is poised for robust growth, reflecting evolving demands and innovative solutions.

    Market Segmentation

    California Commercial Building Market Size Outlook

    • Small Buildings (less than 50,000 square feet)
    • Medium Buildings (50,000 to 200,000 square feet)
    • Large Buildings (over 200,000 square feet)

    California Commercial Building Market Regional Outlook

    • North America
    • Europe
    • South America
    • Asia Pacific
    • Middle East and Africa

    California Commercial Building Market Application Outlook

    • Commercial Offices
    • Retail Stores
    • Industrial Warehouses
    • Healthcare Facilities
    • Educational Spaces

    California Commercial Building Market Building Type Outlook

    • Office Buildings
    • Retail Buildings
    • Industrial Buildings
    • Healthcare Facilities
    • Educational Facilities

    California Commercial Building Market Construction Type Outlook

    • New Construction
    • Renovations
    • Retrofits

    California Commercial Building Market Sustainability Features Outlook

    • LEED Certification
    • Energy-Efficient Lighting
    • Solar Panels
    • Green Building Materials

    Report Scope

    Report Attribute/Metric Details
    Market Size 2024 151.04 (USD Billion)
    Market Size 2025 154.86 (USD Billion)
    Market Size 2035 198.85 (USD Billion)
    Compound Annual Growth Rate (CAGR) 2.53% (2025 - 2035)
    Report Coverage Revenue Forecast, Competitive Landscape, Growth Factors, and Trends
    Base Year 2024
    Market Forecast Period 2025 - 2035
    Historical Data 2020 - 2024
    Market Forecast Units USD Billion
    Key Companies Profiled Apple Inc, DivcoWest, JLL, Alexandria Real Estate Equities, Tishman Speyer, Equity Office Properties Trust, Brookfield Properties, Nuveen Real Estate, Kilroy Realty Corporation, The Swig Company, Prologis, HINES, The Irvine Company, CBRE Global Investors, Harvest Properties
    Segments Covered Building Type, Construction Type, Size, Application, Sustainability Features, Regional
    Key Market Opportunities 1 Green Building Initiatives2 Smart Building Technologies3 Coworking and Flexible Spaces4 Infrastructure Development5 Ecommerce and Logistics Expansion
    Key Market Dynamics Rising construction costs, growth of green buildings, increasing demand for flexible workspaces, technological advancements, surge in ecommerce
    Countries Covered North America, Europe, APAC, South America, MEA

    FAQs

    What is the projected market size of the California Commercial Building Market in 2024?

    The California Commercial Building Market is projected to reach a valuation of approximately USD 151.04 billion in 2024.

    What is the anticipated CAGR of the California Commercial Building Market from 2025 to 2034?

    The California Commercial Building Market is anticipated to grow at a CAGR of approximately 2.53% from 2025 to 2034.

    What are the key factors driving the growth of the California Commercial Building Market?

    The growth of the California Commercial Building Market is primarily attributed to factors such as increasing population, expanding business activities, and government initiatives to promote sustainable and energy-efficient construction.

    Which region is expected to hold the largest market share in the California Commercial Building Market?

    The Southern California region is anticipated to account for the largest market share in the California Commercial Building Market, driven by the presence of major metropolitan areas such as Los Angeles and San Diego.

    What are the primary applications for commercial buildings in California?

    Commercial buildings in California are primarily utilized for various purposes, including offices, retail stores, healthcare facilities, educational institutions, and industrial warehouses.

    Who are the major competitors in the California Commercial Building Market?

    Key competitors in the California Commercial Building Market include companies such as DPR Construction, Turner Construction Company, and McCarthy Building Companies.

    What are the challenges faced by the California Commercial Building Market?

    The California Commercial Building Market faces challenges such as rising construction costs, labor shortages, and regulatory compliance, which can impact project timelines and budgets.

    How is technology influencing the California Commercial Building Market?

    Technology plays a significant role in the California Commercial Building Market, enabling the adoption of smart building systems, automation, and sustainable design practices.

    What are the emerging trends shaping the California Commercial Building Market?

    Emerging trends in the California Commercial Building Market include a focus on sustainability, wellness, and flexible workspaces that cater to the evolving needs of businesses and occupants.

    What is the outlook for the California Commercial Building Market in the next five years?

    The California Commercial Building Market is anticipated to maintain steady growth over the next five years, driven by continued economic expansion and the increasing demand for modern and sustainable commercial spaces.

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