The NAIOP CRE Sentiment Index

Release Date: Fall 2021

Index Score

Download the Fall 2021 NAIOP CRE Sentiment Index Report. 

Key Findings

The NAIOP CRE Sentiment Index for September 2021 is 56, up slightly from April. This indicates that respondents expect conditions for commercial real estate to improve over the next 12 months (see Figure 1). The Index is higher than at any point since the COVID-19 pandemic began and has returned to the level observed in March 2019.

Figure 1

Survey respondents continue to expect most conditions to improve over the next year. The overall outlook remains positive for most market conditions, and it has improved since April for occupancy rates, rents, cap rates and employment within respondents’ own firms (see Figures 3 and 4).

Commercial real estate professionals expect construction costs to continue to rise, but they see the pace of material price inflation slowing. Most respondents indicate that construction material and labor costs will increase over the next 12 months, though they are less pessimistic about material costs than in the April survey. This indicates that inflation is less of a concern than it was in the spring.

Respondents remain optimistic about general industry conditions next year. Although slightly less optimistic than in April, respondents expect greater improvement over the next 12 months than in surveys before the pandemic (see Figure 2). The score for general industry conditions (61) is calculated separately from the CRE Sentiment Index and may reflect respondent expectations for other factors that affect the commercial real estate industry, such as macroeconomic conditions.

Overall, respondents remain optimistic about the future, but high levels of variation among their answers to individual questions suggest continued uncertainty. Lower levels of agreement among respondents may also reflect a more challenging environment for some property types and geographic markets. The open-ended comments suggest a brighter outlook for industrial and multifamily properties than for office and retail properties.

A large majority (62.7%) of respondents expect to be most active in projects or transactions related to industrial properties over the next year. Multifamily properties attracted the next largest share of interest (22.6%), followed by office properties (11.9%). Only 2.8% of respondents indicated that they expect to be most active in retail properties.


Graphs and Observations

See the composite scores for the individual components in past surveys and new data on expectations for development and comparisons among professions.

Read more about Graphs and Observations

Past Indexes and Understanding the Index

The biannual survey is sent to NAIOP member developers, owners, building managers, brokers, analysts, consultants, lenders and investors.

Read more about Past Indexes and Understanding the Index
NAIOP Sentiment Index