HERNDON, Va. – NAIOP’s Commercial Real Estate Sentiment Index has dropped from 57 to 45 over six months, reflecting growing pessimism amid COVID-19.
An index below 50 indicates unfavorable conditions are expected in the coming 12 months.
This is the first time the index has registered below 50 since it began in 2016.
The sentiment reading for effective rents fell from 62 last fall to 45. The outlook for occupancy rates fell from 57 to 44. Sentiment was 67 for both debt and equity availability in September, but both are now in the mid-40s.
The outlook for construction material and labor costs went from 29 to the low 40s, signaling that respondents believe costs will fall because of lower demand.
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