SIOR Survey Reveals Industrial Sector Growth, Office Stagnation
The third monthly survey from the professional organization measuring COVID-19's impact saw an increase in overall market confidence and increased on schedule transactions in the industrial sector.
The Society of Industrial and Office Realtors has just released its June survey examining the effects of the COVID-19 pandemic on its North American members’ current transactions and level of confidence in regional markets. And while SIOR found that office real estate brokers are continuing to face challenges, the industrial sector is gaining strength as the pandemic persists.
The June survey is the third monthly survey from the professional organization, which in April began to examine COVID-19′s effect on markets. June’s survey represents the highest confidence level for the office and industrial markets combined, with an increase from 6.22 to 6.61 since May.
This confidence did vary by region and market, however. SIOR members in the Global region reported shifts in both directions, with industrial confidence increasing 6.3 to 7.3 and office confidence dropping 6.8 to 5.9. The Central region, however, saw decreases to industrial confidence, dropping from 6.1 to 5.21 over the past month. The Northeast saw the greatest increase for the office sector of any region, jumping from 5.5 to 6.6 region.
The survey also noted changes in the status of current transactions. On schedule transactions jumped as a percentage of total transactions from May to June, increasing from 31% to 37%. Those gains were primarily due to the industrial sector, which saw on schedule transactions increase from 31% to more than 41% over the past month. The office sector, meanwhile, saw a slight drop of less than one percent in on schedule transactions.
SIOR Global President Mark Duclos said that he sees a clear trend emerging over the past three months, one that favors industrial growth.
“E-commerce continues to be a significant driver for industrial and in many ways, 2020 is likely to reflect that. On the office side, deals are still being done, albeit at slower and reduced levels,” Duclos says in prepared remarks. “Many companies are determining how to have employees safely return to work, and finding some logical solutions could take time.”