Nearly a year into the pandemic, the CRE industry is showing mixed signs of the recovery. The SIOR Snapshot Report shows waning investor confidence alongside strong transaction volume.

Overall investor confidence fell in the third quarter after two consecutive quarters of improvement. In the fourth quarter, confidence fell to 6.2 out of 10, the lowest level since the second quarter of 2020, when investor confidence was 6.3 out of 10. Industrial had the highest level of investor confidence at 6.9 out of 10, while office has the lowest investor confidence at 4.7 out of 10.

Although investor confidence fell in the fourth quarter, in schedule transactions increased from 42% in the third quarter to 67% in the fourth quarter. On hold transactions decreases, but cancelled transactions remained the same. Both office and industrial transactions showed an improvement. On-schedule office transactions increased at 52% from 38% in the third quarter, but cancelled transactions increased at 20% from 17% in the third quarter. On schedule industrial increased significantly from a rate of 51% in the third quarter to 74%. Plus, cancelled transactions decreased from 12% to 9%.

Recommended For You

With improving transaction volume, sellers continue to have the upper hand at the deal table. In the survey, 49% of overall SIORs said that site acquisition prices are increasing rapidly or at a steady pace. Only 21% reported lower prices and a buyer's market. Still, buyers have a better opportunity to negotiate than the pre-pandemic market. In 2019, only 6% of survey respondents said this is a buyer's market. However, responses vary based on asset class. Industrial transactions favor sellers, with 63% of respondents reporting a seller's market. In office, the number falls to 21% saying that the market favors sellers.

The transaction activity could be linked to improved leasing activity. Of the participants in the SIOR survey, 51% reported minimal leasing activity, an improvement from 59% in the third quarter. Consistent with transaction volume, industrial leasing activity was strong. With little to no vacancy in many markets, only 34% of SIOR respondents in the survey said that leasing activity was lower in the fourth quarter; however, 88% of respondents made the same claim about office leasing.

Several sentiment reports have rolled out recently reflecting wildly different market conditions. The RCLCO Current Real Estate Market Sentiment Index has increased 22.4 points over the past six months, with respondents predicting that conditions will improve "significantly" over the next 12 months. In California, the Allen Matkins/ UCLA Anderson Forecast biannual commercial real estate survey offered an optimistic outlook for multifamily and industrial product, but a pessimistic outlook for retail and office product over the next three years.

NOT FOR REPRINT

© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.