Past Indexes and Understanding the Index

Past Indexes

Understanding the Index

Changes in the scores of the individual survey questions between the March 2019 and the September 2019 surveys ranged between -0.50% and +5.00%. This differs from most surveys in that the individual scores were mostly positive (seven of nine questions were positive), and the most consistent responses were highly positive. The overall composite index for September 2019 (57) indicates that there is in the CRE industry due to mostly positive CRE economics, with the noted exceptions of construction labor and construction materials costs (negative influences).

Note: The score for question 10 regarding overall sentiment in the CRE marketplace is 0.28 (53 on a 100-point scale), whereas this survey’s composite Index is 57. This single question’s response (question 10) is somewhat less than the Sentiment Index which had been fairly consistent with the single question over the prior four years. Said differently, 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 specifically 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 4 points in this survey), the single General Sentiment question is validated. The response rate for this survey was 5.55% and the margin of error for the index was 4.66%.


The NAIOP Sentiment Survey is conducted biannually, in March and September. The survey is sent to roughly 7,000 NAIOP members in the U.S. who are developers, investors, brokers and operators in the office, industrial, retail and multifamily sectors. It asks 10 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 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 295 distinct companies are represented in this survey. Product types owned/under development by respondents broke out to roughly 32% office, 35% industrial, 18% retail and 15% multifamily; western regions were slightly more represented than eastern regions followed by the South and the Midwest.

Survey participants receive 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 between September 4 and September 18, 2019. The first two readings in this survey series were beta tests sent to approximately 600 NAIOP members in February and September 2015, generating response rates of around 17%. Comparing this survey to the previous beta tests, respondents’ consistency across questions was nearly the same, with face rents being the most consistently answered question and construction materials costs, construction labor costs and employment being the least consistently answered questions. As such, the 2016 and 2017 results do not vary significantly from those in the beta tests.

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 is collected by NAIOP and the survey questions were created, refined and finalized between 2014 and 2016 with the assistance of several NAIOP Distinguished Fellows.