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NAIOP CRE Sentiment Index: Outlook Remains Positive Though Cost Pressures Persist

by NAOIP on

The latest NAIOP CRE Sentiment Index shows respondents continue to expect improvement across several key commercial real estate (CRE) indicators, but optimism has moderated as ongoing cost pressures and uncertainty weigh on development feasibility and near-term decision-making, according to the report. 

Published by the NAIOP Research Foundation, the Index is designed to predict general conditions in the CRE industry over the next 12 months by surveying industry professionals on the future conditions of their projects and markets. The current Index is 52, down slightly from the October 2025 Index of 56, which indicates that respondents still expect conditions for CRE to improve over the next 12 months, though optimism has moderated. 

Key takeaways: 

  • Respondents anticipate that capital market conditions will continue to improve, though at a slower pace than previously expected.  
  • Compared with the fall 2025 survey, respondents expect both construction material and labor costs to rise more rapidly over the next year. Open-ended survey responses emphasized that elevated costs, permitting and approval delays, and infrastructure-related constraints, including power availability, are limiting the number of viable projects.  
  • Despite cost and capital challenges, respondents continue to expect higher occupancy rates and rent growth across property sectors. Developers and building owners also anticipate an increase in the dollar volume of transactions and projects, signaling ongoing investment activity.  
  • Consistent with prior surveys, most respondents expect to be most active in industrial and multifamily sectors over the next 12 months. Data centers and retail properties attracted the next highest levels of interest. 

“While elevated costs are clearly influencing decision-making, they are also fostering greater discipline across the industry,” said Marc Selvitelli, president and CEO of NAIOP. “Developers are becoming more focused and strategic about what gets built, a shift that could ultimately support higher-quality assets and a healthier market overall.” 

Survey respondents are NAIOP members in the U.S. who are developers, building owners, building managers, brokers, analysts, consultants, lenders and investors in commercial real estate. A total of 266 respondents from 237 distinct companies participated in the Spring 2026 survey. Responses were collected March 18-26, 2026.