by Rebecca Walker — August 29, 2008—The Second Quarter 2008 SIOR Commercial Real Estate Index, compiled by the Society of Industrial and Office Realtors (SIOR) in association with the National Association of Realtors (NAR), indicated that commercial real estate markets have not yet begun their rebound to market equilibrium.
The national Index, which measures 10 variables pertinent to the performance of US industrial and office markets, dropped for a sixth straight quarter to an overall total of 76.4 points. This point drop placed it 23.6 points below the 100 point criteria that represents a balanced office and industrial marketplace and 43 points below its record high in spring 2006.
The SIOR Commercial Real Estate Index is a diffusion index (see Methodology) where a score of 100 indicates markets in balance. A score of 76.4 reflects conditions that are significantly less favorable for landlords and sellers, but excellent for tenants and purchasers.
SIOR commercial real estate professionals provided their views on second quarter 2008 market conditions in their respective markets in a July survey.
An unprecedented number of SIOR members—83 percent—report that their local markets are feeling the impact of the decline in the national economy. This number is 59 percent higher than just one year ago, the survey found.
Leasing activity is down, according to 75 percent of respondents. Concessions benefiting tenants are riding above normal and have increased 29 percent from the same quarter one year ago. Twenty-three percent of respondents indicated that there was virtually no new construction going on in their marketplace and according to 67 percent of respondents construction in general is down.
For more information, see the NAR Web site.
