Past Indexes and Understanding the Index

Past Indexes

Understanding the Index

Changes in the scores of the individual survey questions between the September 2018 and the March 2019 surveys ranged between -3.20% and +3.50%. This spread is larger than what has been seen in surveys since March 2016. The overall composite index for March 2019 (0.56) decreased 1.00% from September 2018 (0.66) and increased 1.00% from March 2018 (0.46), and it has been near this positive level since March 2016. The current survey indicates optimism in the CRE industry due to mostly positive CRE economics with the noted exceptions of construction labor, materials costs and first-year cap rates (negative influences).

Note: The score for question 10 regarding overall sentiment in the CRE marketplace is 0.33, whereas the survey’s composite Index is 0.56. This lower score for question 10 has been fairly consistent during the prior three years. When responses to the first nine questions — which relate to real estate fundamentals — are combined into the composite Index, the result is slightly more positive than when respondents were asked a single, subjective question regarding overall sentiment toward the CRE marketplace. When these two indicators are very close to each other (they are only different by 2.30% in this survey), the single General Sentiment question is validated. The difference may also be attributed to the fact that the response rate was much lower for this survey (268 responses compared to 413 responses in the September 2018 survey). The overall margin of error for this survey is 6.01% compared to 4.84% in September 2018.


The NAIOP Sentiment Survey is conducted biannually, in March and September. The survey is sent to roughly 5,000 NAIOP principal members in the U.S. who are developers, investors, and operators in the office, industrial, retail and multifamily sectors. It was also sent to 2,000 commercial brokers, bringing the total to 7,000 potential respondents. The survey poses questions about jobs, the space markets, construction costs and the capital markets. Respondents indicate whether their 12-month outlook for each category is positive, negative or neutral. The responses are not equally weighted. Instead, weighting varies based on whether the responses to a question are tightly packed or dispersed. Questions with tightly packed responses (meaning there is more consistency among the answers to that question) are more heavily weighted than those with more dispersed responses (which indicate less consistency).

If every participant in the survey selected the most optimistic answer to each and every question, the Index would be positive 5. Conversely, if all of the participants chose the most pessimistic response to each and every question, the Index would be negative 5. The Index is on a 10-point scale, meaning that changes to the composite scores — and the Index itself — will range between zero and 10. A one-point change in the Index equates to a 10.0% change (on an absolute basis).

A total of 197 distinct companies are represented in this survey. Product types owned/under development by respondents broke out to roughly 31.0% office, 34.0% industrial, 18.0% retail and 17.0% multifamily; western regions were slightly more represented than eastern regions followed by the South and the Midwest. The response rate for this survey was 3.34% and the margin of error for the Index was 6.01%.

Survey participants are sent a three-page summary of results showing the percentage breakdown of responses to each question three days after the survey closes. This report is released to all NAIOP members and the public three weeks later. Survey responses for this Index were gathered March 13-27, 2019.

The statistical methodology for this survey was developed and the data analyzed by Tom Hamilton, Ph.D., MAI, CCIM, CRE, the Gerald Fogelson Distinguished Chair of Real Estate in the Chicago School of Real Estate at Roosevelt University. The survey data are collected by NAIOP and the survey questions were created, refined and finalized between 2014 and 2016 by the NAIOP Distinguished Fellows listed below.
Shaun A. Bond, University of Cincinnati
David L. Funk, Roosevelt University
Tom Hamilton, Roosevelt University
Joshua Harris, University of Central Florida
Barry F. Hersh, New York University
Andre Kuzmicki, York University
Craig Tsuriel (Tsur) Sommerville, University of British Columbia
Michael Maxwell, Nova Southeastern University
Gerard C.S. Mildner, Portland State University
Mark Stapp, Arizona State University
Charles C. Tu, University of San Diego