Key commercial real estate index improves again

The Society of Industrial and Office Realtors Commercial Real Estate Index, a key attitudinal survey of more than 360 local market experts, shows a firming up of commercial real estate market fundamentals.

The improving economy and job creation point to a growing demand for commercial real estate.

The SIOR index, measuring the impact of 10 variables, rose 6.8 percentage points to 57.5 in the first quarter, the highest since the fall of 2008. The Northeast and South drove improvements in market conditions. Vacancy rates are improving, but concessions continue to make it a tenant’s market.

Although the SIOR index remains notably lower than a level of 100 that represents a balanced marketplace, this is the sixth consecutive quarterly improvement after almost three years of decline. The last time the index was at 100 was in the third quarter of 2007.

The multifamily (apartment) sector is the leading commercial component, registering consistently falling vacancy rates and rising rents.