A recently released NAIOP survey shows continued optimism about the industrial real estate sector, along with improving rent collection and development activity since April. This was the third survey of the organization’s U.S. members since the onset of the COVID-19 pandemic.
The June survey results also provide insights into rent collection and rent relief, which are top of mind for investors in these challenging times. The good news is that 69% to 74% of respondents reported on-time, full payments by 90% or more of their industrial and office tenants in June. (Note that the survey also covered multifamily and retail properties).
Tenant requests for relief declined across all asset types from April to June, with industrial and office real estate showing similar results –moving down from approximately 50% in April to about 38% in June.
Industrial Real Estate Development Outlook Improves
The survey also notes that the impact on current development projects continues to soften,
with fewer reports of leasing declines, delays in financing or government restrictions impacting construction. While 66.1% of NAIOP survey respondents note delays in permitting or entitlements due to COVID-19, the percentage
of respondents reporting a decline in leasing dropped from 57.2% in May to 49.4% in June; reports of delays in financing also dropped from 23.3% to 16.1% in June.
The industrial sector remains the strongest of all sectors, including multifamily, office and retail. The percentage of respondents noting new industrial development more than doubled since April, to 43.3% from 18.5%.The survey tracks sentiment from investors, lenders, developers, among other CRE practitioners.