As we approach the end of what has been an incredibly eventful 2020, commercial real estate professionals have weighed in with their feelings about the state of the market and the outlook moving forward. According to the latest Real Estate Roundtable Sentiment Index for Q4 2020, optimism is on the rise.
What is the Real Estate Roundtable Sentiment Index?
The Real Estate Roundtable Sentiment Index is a quarterly survey of senior executives in the commercial real estate industry. Conducted by FPL Advisory Group, it gauges the views of presidents, CEOs, and other industry executives relative to expectations and confidence surrounding the commercial real estate market. The survey covers three topics: overall real estate conditions, access to capital markets, and real estate values.
Q4 2020 Findings Indicate Increased Optimism
2020 has been anything but a typical year. The Real Estate Roundtable Economic Index itself is a single figure measured on a scale of 1-100. A score of “100” would indicate that “all” respondents believe conditions are “much better” today than the prior year and will be “much better” one year from now.
The latest Q4 2020 findings aren’t a perfect score, but they do indicate optimism in this sector:
Overall Real Estate Conditions
The Sentiment Index for Q4 was 44, which an increase of two points over the previous quarter. Survey respondents have expressed optimism about the current state of the commercial real estate market as well as future conditions.
Participants in the retail and hospitality industries were slightly less optimistic but noted that there were enough elements in place to drive a successful recovery. Respondents also noted that the office sector is going through changes. But flexible office space agreements could be the answer for many businesses.
Access to Capital Markets
Most survey respondents indicate that equity and debt are highly available in the commercial real estate sector. Many also note that the real estate industry has produced lower levels of leverage than were experienced in the last economic downturn.
Real Estate Values
With reference to asset values, buyers are seeking steep discounts in some areas, particularly the hospitality sector. But, despite distress in some portfolios, owners have been able to maintain positions thanks to a combination of forbearance arrangements and lower leverage.
Experienced Commercial Real Estate Guidance in Charleston, SC
There is every reason to be optimistic about the commercial real estate market heading into 2021. If your business needs leasing & sales, property management, owner representation, or development services, find out how Caldwell Commercial Real Estate can help.
Our experienced real estate professionals have more than 80 years of combined experience in the industry. We’d welcome the opportunity to earn your business in the coming year. Contact us today.