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The latest Snapshot Sentiment Survey by the Society of Industrial and Office REALTORS® found that on-time transactions were up 20 percentage points in the fourth quarter compared to the previous quarter. Despite the frenzied market, the trust that many industrial specialists had experienced waned.
Highlights of the Q4 report:
- After rising in the third quarter of 2020, confidence fell in the fourth quarter and fell below the second quarter's level at the height of the pandemic lockdown. The report found a global confidence of 6.2 (out of 10) compared to 6.3 in the second quarter. Confidence in the industrial sector was higher at 6.9.
- 88% of the office specialists reported a decline in leasing activities in the fourth quarter and 49% reported lower asking rents. Among industry specialists, only 34% reported a decrease in leasing activity and 14% reported a decrease in rents.
- Across all areas, SIOR members said transactions were progressing at an improved pace: 67% of transactions were on schedule in the fourth quarter, compared with just 47.1% in the third quarter and 31.7% in the second quarter. On hold transactions decreased to 20% in the fourth quarter, compared to 39.5% in the third quarter, while the number of canceled transactions remained stable at around 13%.
The quarterly survey also tracks how current market performance is affected by local, national, and economic conditions. Both industrial and office specialists saw positive effects of local economic conditions rather than national or global conditions in the fourth quarter. Unsurprisingly, those in the office sector were more likely to experience a macroeconomic blow: For example, 72% of office professionals said economic conditions had a moderate or significant negative impact on market performance in the fourth quarter. In contrast, almost 50% of the industry specialists stated that the economic conditions had a moderately or significantly positive effect.
SIOR now combines the results of the quarterly survey with the responses to the survey on the Commercial Real Estate Index in order to obtain a detailed overview of the current market conditions and to compare them with historical averages.
Read the entire report on sior.com.