Commercial Real Estate Sentiment Ticks Up as Rate Outlook Improves

Commercial Real Estate Sentiment Ticks Up as Rate Outlook Improves

Confidence among commercial real estate professionals edged higher in NAIOP’s latest sentiment survey, reflecting cautious optimism driven by expectations of lower interest rates. While respondents remained concerned about rising material and development costs, most anticipate a more favorable business environment over the coming year.

The national sentiment index, based on responses collected in September, rose to 56, up from 50 in March. According to NAIOP, readings above 50 indicate that market participants expect generally positive conditions in the next 12 months.

“Respondents expect that construction material and labor costs will rise, but more slowly than anticipated in the spring,” the report noted. The survey also found stronger expectations for improved financing conditions, increased deal activity, and slightly better outlooks for occupancy rates and rental growth compared with the previous survey.