NAIOP CRE Sentiment Index: Positive Reading Reaches All-time High

Posted on November 2, 2018

The NAIOP CRE Sentiment Index for September 2018 (a composite of nine survey questions), showed positive changes in seven of the nine questions that underpin the Index. This survey's 0.66 Sentiment Index reading is the highest posted since the full survey commenced in March 2016.

Key takeaways:

• The reading showed positive changes in seven of the questions that underpin the Index, with five of them reaching all-time highs: employment; face rents; effective rents; available debt; and available equity.
   
• This survey's 0.66 Sentiment Index score is the highest posted since the full survey commenced in March 2016, as respondents indicated that the fundamentals underpinning commercial real estate will be stronger in 12 months than they are today.
   
• The highest reading in the survey indicated that CRE executives expect to add employees at real estate companies over the next 12 months.
   
• At the same time, however, respondents are greatly concerned about the costs of construction materials and labor as indicated by the lowest score recorded for each category since the survey started.

View graphs and observations for each of the 10 questions about jobs, the space markets, construction costs, the capital markets and more.

View the Report

The NAIOP CRE Sentiment Survey is conducted biannually, in March and September. This 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. For the first time, it was also sent to roughly 2,000 commercial real estate brokers, bringing the target list to 7,000. 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). 

To share your feedback or inquire about participating in the next Sentiment Index survey, contact [email protected].