Commercial real estate (CRE) is a part of everyday life for individuals, businesses, and even cities. For individuals, commercial real estate touches everything from where they work and shop to where they live and visit for entertainment. For businesses, commercial real estate can be the office or shop where they operate, or it can represent an investment, a business platform, or a source of income. For cities, commercial real estate investment can attract new residents, make space for new businesses, and improve the local area.

These varied interests in commercial real estate create many influences on market dynamics. To make this information easier to comprehend, the Atlanta Fed developed a CRE Momentum Index. The Index provides a time series analysis of numerous market dynamics which are aggregated to help users understand the momentum of change in commercial real estate markets across the country. Currently, the majority of deep analysis on commercial real estate requires a paid subscription and is not widely available, so this tool gives deeper analysis to the public compared to other* publicly available commercial real estate market analysis tools.

The CRE Momentum Index originated from internal analysis in the Supervision, Regulation, and Credit Division used for bank examinations. The Index has been redesigned and expanded to include more than 300 individual markets and more than 20 total variables. The tool provides an index for the four major property sectors—multifamily, office, retail, and industrial—as well as an overall market index that combines the four individual indices into one all-encompassing index. Sharing this information more broadly allows our risk analysis team to transmit its view of commercial real estate market conditions and highlight where risks may be emerging.

The contribution of this tool lies at the intersection of four important factors: (1) it provides a broad analysis for many markets across the United States; (2) it offers a historical view and frequent data updates for recent data (monthly); (3) it incorporates variables that capture multiple sides of commercial real estate dynamics; and (4) the information is publicly available.

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* Publicly available market analyses similar to this includes "Cycle Monitor—Real Estate Market Cycles," Dr. Glenn Mueller/Black Creek Group.