NAIOP Sentiment Index: Leaders’ Outlook for CRE

NAIOP Background

NAIOP, which originally began in 1967 as an association of industrial and office park owners, has since expanded to provide advocacy, education and business opportunities for the entire commercial real estate industry.

NAIOP’s sister organization, the NAIOP Research Foundation, is a leading think tank dedicated to conducting research assessing the trends, economic viability and needs within the industry.


The Sentiment Index

NAIOP publishes an excellent Sentiment Index summarizing the results of their biannual survey of 5,000 of its members, which includes developers, investors and operators in all property sectors.  The survey is designed to predict general conditions in the commercial real estate industry over the subsequent 12 months. The nine questions within the survey range in topic from construction costs to capital markets. The most recent survey was completed in September 2016.


And The Survey Says…

Sentiment is positive (+0.47 out of a range of -5.00 to +5.00) but with muted expectations for the upcoming year, which is consistent with key economic indicators such as payroll growth and forecasted GDP growth.admiral real estate market outlook naiop sentiment index scaleAccording to the survey, investor sentiment is being propped up by expectations of slow growth in labor costs and limited increases in capitalization rates.  Effective rents are expected to increase moderately, and the outlook for capital availability is positive, but subdued.

admiral real estate commercial survey naiop sentiment index graph
The net result of the September 2016 Sentiment Index is “an expectation that the CRE market is approaching a period of slowing growth.”


Direct Quotes from Respondents

“For the next twelve months, we see the market staying strong.
We will be watching the horizon for signs of a slowdown, however.”

“We are entering a small correction. Not a bad storm but cloudy days for sure.
Should be short lived.”


“The top of this cycle is a plateau versus a peak, and [we will be there] for the next year.”


For more information, please contact Jonathan Gordon, CEO/Corporate Broker,
or call 914-779-8200 x115


Admiral Real Estate Services Corp. is a commercial real estate brokerage firm, offering agency leasing, investment sales and tenant representation services. Based in Westchester, the company currently lists and/or manages over 100 retail, office and development properties in the New York metropolitan area.

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