Real Estate Roundtable’s Q2 Economic Sentiment Index Falls
Economic and geopolitical factors sink score by 15 points to 51, barely “positive” on 100-point scale.
Commercial real estate executives remain optimistic about overall Q2 market conditions despite growing economic headwinds and geopolitical uncertainty, according to The Real Estate Roundtable’s Q2 2022 Economic Sentiment Index.
Headwinds that most commercial real estate sectors such as ones tied to economic adversity and geopolitical tensions are affecting performance for the near term.
The Real Estate Roundtable’s Sentiment Index for Q2 registered an overall score of 51, a decrease of 15 points from the previous quarter’s overall score and 26 points lower than a year earlier. Any score above 50 on the 100-point scale is considered positive.
Executives’ Overall Sentiment ‘Positive’
Inflationary pressures, interest rate increases, labor shortages and supply chain disruptions are the culprits, according to Jeffrey DeBoer, president and CEO, Real Estate Roundtable (RER), based on published reports.
He said that despite that, “the overall sentiment of commercial real estate industry senior executives remains positive. Businesses and individuals continue to rethink how real estate meets their evolving working, living, and traveling preferences. Building owners, managers and financiers across the nation are partnering with their business and residential tenants to respond, while also pressing forward in developing and redeveloping buildings to be greener, smarter, and more efficient.”
RER’s Q2 Sentiment Index reveals especially bright spots for lease demand in a wide swath of the economy, particularly regarding life sciences, industrial, multifamily, and data center assets.
Additionally, index survey participants cited a “continued availability of debt and equity capital despite those heightened concerns over rising interest rates, geopolitical concerns, and inflationary risk.”
“We urge national policymakers to focus on creating jobs and supporting strong real estate asset values,” DeBoer said. “Both actions would buttress the overall economy and help local community budgets provide needed safety, education and transportation services.”