Download the Sentiment Index: naiop.org/sentimentindex
October 05, 2023 | Washington, D.C.
The NAIOP CRE Sentiment Index is 46, slightly lower than it was in April, indicating that respondents expect conditions for commercial real estate to worsen over the next 12 months, though perhaps at slower rates. The survey comes as completions outpace demand for multifamily and industrial buildings and the office sector struggles with low occupancy rates. High interest rates continue to limit the volume of commercial real estate transactions and make refinancing existing buildings more difficult.
Among the key findings of the survey:
“There is no question that challenging times will continue, largely due to a higher interest rate environment,” said Marc Selvitelli, president and CEO of NAIOP. “There are some signs that the industry is closer to turning a corner, with respondents signaling that equity markets and deal (or transaction) volume have nearly stabilized. We are concerned that some commercial real estate firms will experience employment declines until the market turns around.”
The NAIOP CRE Sentiment Index is designed to predict general conditions in the commercial real estate industry over the next 12 months by surveying industry professionals on the future conditions of their projects and markets. The survey includes questions about jobs, space markets, construction costs, capital markets and other real estate development fundamentals. If every participant in the survey selected the most optimistic answer to every question, the index would be 100. Conversely, if all the participants chose the most pessimistic response to every question, the index would be 0.
About NAIOP: 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.org.
Kathryn Hamilton, NAIOP vice president for marketing and communications
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