NAIOP Releases Commercial Real Estate Industry Sentiment Index

October 26, 2020

WASHINGTON, D.C. – The NAIOP CRE Sentiment Index for September 2020 is 45, indicating that respondents expect unfavorable conditions for commercial real estate over the next 12 months.

“Although industry professionals know more about how COVID-19 affects demand for commercial real estate than they did in the spring, uncertainty remains about when the economy will fully recover,” said Thomas J. Bisacquino, NAIOP president and CEO.

Respondents expressed a more negative outlook on conditions related to the performance of commercial properties in the markets in which they are active than in a similar survey conducted in mid-March, just as COVID-19 was becoming widespread in the U.S. Developers/owners are asked about their own buildings or projects, all other survey participants are asked about projects they work on as well as the markets/product types they service.

They were more pessimistic about occupancy rates, face rents, effective rents and employment within their own firms. They also predict cap rates to rise slightly, but held the same expectation in March.

Participants in the survey were less pessimistic about construction costs and the availability of financing. They expect debt to be about as available in 12 months as it is now, and for equity to be slightly more available. While respondents predict construction labor and material costs to be higher than they are currently, they expect these costs to rise less rapidly than in March and much less rapidly than in earlier surveys.

Measured separately from the components of the sentiment index, respondents’ expectations for general industry conditions rebounded to a score of 47 from a low of 38 in March.  The alignment of this score with the index indicates that respondents’ general outlook for the commercial real estate industry is much closer to their expectations for their own properties and markets than in March.

The survey is sent bi-annually to 10,500 U.S. NAIOP members who are developers, building owners, building managers, brokers, analysts, consultants, lenders, and investors in the office, industrial, retail and multifamily sectors. If every participant in the survey selected the most optimistic answer to every question, the index would be 100. Conversely, if all of the participants chose the most pessimistic response to every question, the index would be 0.

A total of 341 respondents from 266 distinct companies participated in this survey. Product types owned/under development by respondents broke out to roughly 15% office, 62% industrial, 3% retail and 20% multifamily; western regions were slightly more represented than eastern regions, followed by the South and the Midwest.

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NAIOP, the Commercial Real Estate Development Association is the leading organization for developers, owners, investors and related professionals in office, industrial, retail and mixed-use real estate. NAIOP provides unparalleled industry networking and education and advocates for effective legislation on behalf of our members. NAIOP advances responsible, sustainable development that creates jobs and benefits the communities in which our members work and live. For more information, visit

NAIOP Contact: 
Kathryn Hamilton, NAIOP vice president for marketing and communications
703-904-7100, ext. 165

David Harrison
Harrison Communications

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