The National Association of Realtors has rolled out a Commercial Real Estate Demand Index that tracks early economic drivers of space demand across 306 U.S. metro areas, the trade group announced Tuesday. The index is designed to offer landlords, lenders and investors a forward-looking view of local office, industrial, retail and multifamily markets.

The index is designed to capture shifts in demand before they appear in traditional market indicators such as vacancy, rents or completed leasing, NAR said. It focuses on local economic conditions that typically precede new space needs, including job growth in key sectors and population changes.

NAR built the index from publicly available government data and updates it quarterly. It combines four property-type subindices: office, which measures growth in professional and business services employment; industrial, which tracks growth in manufacturing, transportation and warehousing employment; retail, which uses growth in retail trade and leisure and hospitality employment; and multifamily, which relies on population growth and net migration, both domestic and international.

The four components are then weighted to create an overall score: office at 22 percent, industrial at 28 percent, retail at 22 percent and multifamily at 28 percent. Historical data are available quarterly from 2022 through the latest reported quarter.

The Commercial Real Estate Demand Index is a relative measure. Each quarter, every metro area is compared to the 305 others tracked in the dataset. A score of 100 represents the average metro. Scores above 100 indicate stronger demand drivers relative to other markets, while scores below 100 indicate weaker relative momentum.

NAR emphasized that a score below 100 does not necessarily signal contraction. Many metros with sub-100 readings may still be adding jobs and residents, but at a slower pace than the average market.

The index does not measure vacancy, rents, absorption or national-level demand. Instead, it focuses on the local drivers that support future demand for commercial space. Employment inputs come from the Bureau of Labor Statistics, while population and migration data are drawn from the U.S. Census Bureau's Population Estimates Program.

NAR said it will publish an accompanying analysis each quarter that highlights current rankings, notable shifts and trends by property type.