The National Association of Realtors (NAR) has premiered its Commercial Real Estate (CRE) Demand Index, a quarterly index designed to measure the economic drivers of commercial real estate demand across 306 metropolitan areas.
According to the organization, the index will focus on the office, industrial, retail, and multifamily sectors of commercial real estate, using publicly available government data to produce demand scores and an overall market score.
Rather than measuring current property-market conditions such as vacancy rates, rents or leasing activity, the CRE Demand Index will consider local economic conditions that can generate demand for commercial space while offering an early view of market trends before they are reflected in traditional commercial real estate indicators such as leasing activity and vacancy rates.
The index will also compare each metro with the others, using a score of 100 to represent the average metro. Updates will be published on a quarterly basis, with historical data reaching back to 2022.
“Commercial real estate demand begins with what’s happening in the local economy,” said Nadia Evangelou, principal economist and director of real estate research at NAR. “Demand starts before a lease is signed. It starts with jobs and people. The CRE Demand Index helps identify those trends earlier, before they’re reflected in traditional market indicators.”
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