SIC 6519 Lessors of Real Property, Not Elsewhere Classified

SIC 6519

This category covers establishments primarily engaged in leasing real property, not elsewhere classified.

NAICS CODE(S)

531190

Lessors of Other Real Estate Property

The lessors of real property industry encompasses companies that own and lease, or only lease, land used for airports, sports facilities, commercial timber operations, some types of lodging, and natural resource excavation to other organizations. Industry participants typically do not engage in the enterprise conducted on their land. About 10,400 companies were engaged as lessors of real property in the mid-2000s according to the U.S. Census Bureau. They employed some approximately 34,750 employees and generated $5.75 billion in revenues.

Real estate lessors bring together owners of land and people who are looking for property on which to conduct a certain business activity. They benefit their clients by providing expertise about location, appraisal, and conveyance of legal rights to property. In contrast to real estate brokers, lessors arrange the conveyance of property rights for a limited time rather than permanently transfer ownership; however, lease agreements are often made for as long as 100 years.

Lessors in this industry are typically entrenched in a specific market niche. A company that specializes in leasing timberland, for example, would have knowledge of timber rights, tax codes, logging practices, and other factors specific to that industry. When it matches a land owner with a compatible lessee, the leasing company helps the two parties negotiate terms and secure a legally-binding agreement. Land holding companies often find clients and handle lease arrangements themselves.

In addition to specializing by property function, many real estate lessors focus on one locale or region where they accumulate an in-depth knowledge of local zoning codes, demographics, and land values. As a result of geographic and functional diversification, the industry is highly fragmented. In the mid-2000s the top 50 firms held less than 7 percent of the entire market.

The real estate leasing industry saw rampant growth in the middle of the twentieth century. Besides general economic expansion that boosted leasing activity, the emergence of eminent domain and other real property controls vastly increased the complexity of land rights and transactions. Furthermore, property lessors enjoyed an unprecedented business boom during the mid...

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