than five years, and the highest index total since the
fall of 2008. While fundamentals remain soft, respondents in some areas of the country are clearly experiencing a pick-up in the pace of leasing and sales.
The national index, based on 10 variables pertinent to the performance of U.S. industrial and office
markets, moved up to 50. 7. The figure marked five
consecutive quarters of positive growth in both the
office and industrial markets—the office index rose
7. 3 points while the industrial index gained 8. 7 points.
The growth was present across all four major regions,
with the Northeast leading the way. It is also worth
noting that SIORs were more optimistic about the
outlook for the next quarter—a significant 78 percent
expected markets to improve, up from 59 percent in
the previous quarter.
SIOR Commercial Markets
Commercial markets are slowly improving, as the
majority of indicators advanced. While overall leasing
activity is still soft, traffic is increasing. Motivated by
low rents and generous concessions, tenants are moving into higher quality spaces or renegotiating existing
Development and new construction is mostly inactive. Construction activity was lower than normal
in 98 percent of SIOR markets, while 84 percent of
SIORs experienced no new commercial construction.
Not surprisingly, the market is skewed in favor of buyers, with prices below construction costs.
Given the growing national economy, SIOR members find that their local economies are responding
more positively as well. Regionally, the Northeast and
Midwest recorded strengthening economic conditions.
Looking ahead at 2011, commercial real estate is
expected to continue on a moderate growth path. As
capital from both domestic and global investors enters
the markets, it should disperse in a wider geographic
pattern. Furthermore, as the economy strengthens and
grows, the performance of underlying assets should
boost values and, in turn, lead to increased capital
liquidity across all property types.
Commercial Real Estate Index