August 17, 2021
Bill Poole
Brian Bailey
What is CREMI?
The Commercial Real Estate Momentum Index (CREMI) provides easy access to various metrics for individual markets by sector and facilitates comparisons of
conditions across markets. The index tracks movements in specific metrics (such as occupancy/vacancy rate, rent
growth, and the construction pipeline) and provides a targeted view of real estate conditions in the industrial,
multifamily, office, and retail sectors. Additional metrics, including employment and population growth, provide
information specific to each sector as appropriate. CREMI derives a momentum index value for each sector within a
market and gives an overall momentum index value for the entire market. Upward and downward momentum correspond with
aggregated trends in the market metrics, not necessarily indicating “good” or “bad.”
July 2021 Spotlight: Comparing Commercial Real Estate Sectors
Every month we explore another aspect of the Commercial Real Estate Momentum Index (CREMI) and how it can inform us
about commercial real estate conditions. This month, we will discuss what CREMI tells us about the differences
between the recovery or lack thereof in multifamily, industrial, retail, and office properties.
The following graphics illustrate just how differently each property type has been affected by the pandemic and which
type of commercial real estate has upward or downward momentum as of the second quarter of 2021. Each property type
is discussed in order from highest momentum to lowest.
Multifamily: Higher rents and occupancy rates
The multifamily property type has the highest momentum of the four tracked CRE categories with nearly the entire
country having upward momentum. As we discussed in the previous CREMI article, pandemic
lockdowns kept multifamily construction flat while rapidly increasing housing market prices and limited inventory
for those homes left an ever-increasing group of people resorting to multifamily living as the next best option.
Rent growth and occupancy were the primary drivers in upward momentum for multifamily. The largest declines in
momentum are seen in New…
Read More: Commercial Real Estate Update: Pandemic’s Impact on Each Sector
