Elgin Area Chamber Of Commerce: Commercial Real Estate Professionals Optimistic

Press release from the Elgin Area Chamber of Commerce:

October 19, 2021

NAIOP's Latest Sentiment Survey Shows Improving Attitudes

By Rohit Diwadkar
CoStar News

The commercial real estate trade group known as NAIOP recently released its latest update on industry sentiment showing improving attitudes and optimism about the near-term outlook.

The group's latest commercial real estate sentiment index is 56, up slightly from April when it last took the industry's temperature. Any number over 50 indicates optimism, while an index score below 50 indicates an unfavorable outlook for the coming 12 months.

This fall's number is higher than at any point since the COVID-19 pandemic began in early 2020 and matches a level last observed in March 2019.

The overall outlook remains positive for most market conditions, and sentiment has improved since April for occupancy rates, rents, capitalization rates and hiring. Over the next year, 62.7% of respondents expect to be most active in industrial projects and deals, while 22.6% expect to be most active in multifamily transactions, 11.9% in office transactions and only 2.8% say that they will focus primarily on retail.

Some indicators — such as those measuring the prospects for effective rents, available equity and occupancy rates — have seen noticeable improvements, according to the update. But industry leaders still worry about the cost of construction materials and labor, and they are less optimistic about the availability of financing.

Source: CoStar Group, www.costar.com

This press release was produced by the Elgin Area Chamber of Commerce. The views expressed here are the author’s own.