Society of Industrial and Office Realtors (SIOR)’s latest Q3 2021 broker survey reveals that on-time transactions are at their highest level since the start of the pandemic, while cancelled and on-hold deals are at their lowest level. Additionally, SIOR notes in its Q3 2021 Snapshot Sentiment Report that leasing activity has hit another new high, showing that the pandemic’s impact on commercial real estate continues to wane.
The underlying sentiment indicates the commercial real estate sector is regaining its footing, based on the feedback from brokers across the country. The exclusive survey provides direct feedback from SIOR members, and their comprehensive insight and knowledge of the market provides an honest and complete assessment of North America’s current commercial real estate climate.
SIOR CEO Robert Thornburgh, SIOR says, “The key factor in determining how the industry is doing comes down to the number of transactions that are moving forward. And this latest report reveals that despite the Delta variant surge, supply chain issues at the ports, and rising inflation, the office market continues its recovery and industrial momentum shows no end.”
A few highlights of the report include:
- 82% of all transactions are on schedule, a new record and stark contrast to the 47% in Q3 2020.
- Just 6% of all transactions are now reported as cancelled, a new record low, compared to Q2 2021’s 7% and the high of 17% reported in April 2020.
- Transactions considered on hold also dropped again, from 14% in Q2 2021, to just 12%. By comparison, 40% of all deals were on hold in Q3 2020.
Leasing activity achieved another new high in Q3, with 76% of SIOR members reporting an increase, up from 72% in Q2 2021. This rise was fueled largely by the industrial sector’s continued growth. Industrial brokers reported 85% higher leasing activity, compared to 70% in Q2. And among office specialists, 74% say activity is the same or higher when compared to Q2 2021.
In terms of confidence, the most recent survey of SIOR member indicates overall market confidence remained mostly unchanged, going from 7.6 (out of 10) to 7.5, fueled largely by a half-point decline in the office sector indicator. Industrial confidence remained steady at 8.0 for the third straight quarter. Meanwhile, office confidence dropped from 6.7 in Q2, to 6.2 in Q3.
Thornburgh concludes, “The top brokers who laid a solid foundation early on in the pandemic are now capitalizing on their hard work and as a result, their clients are reaping the rewards.”