North American CRE market reacts sharply to economic downturn

After a strong start to 2020, the impacts of COVID-19 on the commercial real estate industry became evident during the second quarter. The Midyear Market Sentiment Survey released today by Transwestern and Devencore tallied responses from brokers across 43 North American markets on conditions in the office, medical office and industrial property sectors.

According to the survey, the U.S. office index averaged 61.8 for the second half of 2020, signaling weaker market conditions as it fell below the 100-neutral zone. The current index is well below the 106.9 registered at year-end 2019, prior to the onset of the pandemic. In Canada, the office index declined 29 percent since the year-end 2019 survey, from 104.0 to 73.8.

“Across both countries, traditional office space is expected to lag as occupiers pause leasing decisions until the pandemic is under control,” said Elizabeth Norton, senior managing director of researc