NAIOP Sentiment Index Points to Expectations of Challenging Conditions for Next 12 Months
The latest NAIOP CRE Sentiment Index is down from spring 2022, suggesting that respondents expect unfavorable conditions for commercial real estate over the next 12 months. Currently the index stands at 47, compared to 52 in April, 56 a year ago and a pandemic-era low of 45 in March 2020.
Higher interest rates, higher cap rates and a decrease in the supply of equity and debt are expected over the next 12 months. Respondents to NAIOP’s survey predict a sharper increase in cap rates and greater contraction in equity and debt than in any previous survey.
Their outlook for occupancy rates, face rents and effective rents is also less optimistic, though they still expect rent growth.
“Uncertainty with respect to interest rates and inflation certainly contributes to the current index; however, we do see signs of long-term strength in our industry,” said Marc Selvitelli, president and CEO of NAIOP.
Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces.
Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications.
Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).
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