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How Confidence Shifted This Summer

A Recent Snapshot Shows Overall Volatility but Increased On-Schedule Transactions

September 16, 2020
Transaction Procedures & Fees, Coronavirus
By Alexis Fermanis

The Society of Industrial and Office REALTORS®’ Snapshot Sentiment Survey assesses the impact of the COVID-19 pandemic on North American SIOR members’ current transactions and reveals members’ level of confidence in regional markets six months from now. The most recent snapshot—the fourth consecutive survey— reveals a volatile overall market. After a steady incline for several months, market confidence dropped in July, with the office sector continuing to be the hardest-hit area.

The lowest levels of confidence were seen among office brokers in the Northeast, Northwest, and West regions, and among industrial brokers in the Central region. The Canadian, Central, and Southeast regions were the only ones to report more confidence in office than industrial. The actual number of on-schedule transactions is continuing to improve, particularly for the industrial sector, which saw 42% of transactions proceeding on time, up from 35% in June.

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Confidence Wanes

2020 SIOR designees market confidence graph from July 2020
After rising in May and June, the level of confidence SIOR designees had in local markets dipped in July. Confidence is rated on a 10-point scale, with 10 being the highest. Data reflect the average of survey respondents.

July Responses Reveal Key Takeaways

  • Overall, market confidence dipped from June to July (see “Confidence Wanes”).
  • Comparing local market confidence, brokers in large firms and networks reported notably higher confidence than their independent counterparts in the global, Canadian, South, and Southwest regions.
  • Regionally, industrial and office brokers in the global and Canadian regions showed the biggest gains in confidence. The biggest drops in confidence were shown by industrial and office brokers in the West, Southwest, and Northwest regions and office brokers in the Northeast.
  • The overall status of current transactions continued to improve. On-schedule transactions overall increased steadily, from 37% to 39.2%, with corresponding declines in third-party delays and delayed projects. The industrial sector continued to show steady gains, while the office sector showed ongoing uncertainty in July, with on-schedule transactions going from 30.5% to 32.5% but canceled transactions increasing from 16.1% to 20%.
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The survey began in April 2020 and will continue monthly throughout the year. Find the entire report at SIOR’s Thought Leadership Series page and click on "Reports and Briefs."

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