The pandemic has upended commercial real estate markets and created widespread uncertainty about when employees will return to the office. And yet, commercial real estate executives have never been more bullish about current market conditions since the Real Estate Roundtable began gauging industry sentiment 13 years ago.
The trade group representing owners, developers, financiers and other real estate interests released the latest results of its quarterly survey of industry sentiment. An index quantifying people’s feelings about current conditions rose seven points to 85, the highest recorded in the measure’s history. The index scores sentiment on a scale of 1 to 100, and anything above 50 is considered positive.
Real estate executives were slightly less optimistic about conditions a year from now, leaving the future index at 71, for an overall score of present and future confidence at 78, still very strong.
The comparative bullishness is perhaps not surprising given a year ago the nation was still facing tough restrictions as people waited for vaccines. Few deals were getting done. Today, business is far more robust.
“The Roundtable’s quarterly survey shows that 89 percent of respondents believe that general market conditions today are ‘much better or somewhat better’ versus one year ago — with an abundance of available capital compared to one year ago,” the report said.
Still, uncertainty persists, the group noted. The latest survey was conducted in July as the delta variant of the coronavirus began to take hold in the United States. In recent weeks, a new wave of infections and resistance to vaccinations has led some communities to reimpose mask-wearing mandates and take other actions. A dip in optimism about conditions a year from now likely reflects continued concern over the course of COVID-19.
About 89% of real estate executives say property values are somewhat and much higher now than a year ago, and nearly three-quarters expect that to continue a year from now.
Large majorities of commercial real estate executives also say the availability of capital is better than it was a year ago, and most expect that to be about the same or better a year from now.
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