The Society of Industrial and Office REALTORS®’ most recent Snapshot Sentiment Survey showed that on-time transactions increased by 20 percentage points in the fourth quarter, compared with the previous quarter. But confidence eroded, despite the frenetic market many industrial specialists said they were experiencing.
Highlights of the Q4 report:
- After rising in the third quarter of 2020, confidence dipped in Q4, dropping below levels reported in Q2 at the height of the pandemic lockdown. The report noted a global confidence of 6.2 (out of 10) versus 6.3 in Q2. Confidence in the industrial sector was higher at 6.9.
- 88% of office specialists reported a Q4 decline in leasing activity and 49% reported lower asking rents; among industrial specialists, only 34% reported a decline in leasing activity, and 14% saw rents decline.
- Across the board, SIOR members reported transactions were moving forward at an improved rate: 67% of transactions were on schedule during Q4, compared with just 47.1% in Q3 and 31.7% in Q2. On-hold transactions dropped to 20% in Q4, compared with 39.5% in Q3, while the number of canceled transactions remained stable at about 13%.
The quarterly survey also tracks how current market performance is affected by local, national, and economic conditions. Both industrial and office specialists were more likely to see a positive impact from local economic conditions than from national or global conditions in Q4. Not surprisingly, those in the office sector were more likely to feel an overall economic hit: For example, 72% of office specialists said national economic conditions were having a moderately or significantly negative impact on market performance in Q4. By contrast, nearly 50% of industrial specialists said national economic conditions were having a moderately or significantly positive impact.
SIOR now combines the results of the quarterly survey with responses to the Commercial Real Estate Index survey to create one in-depth look at current market conditions and compare them with historical averages.
Read the whole report at sior.com.