Reading the local tea leaves on where commercial real estate is headed just got easier. The University of St. Thomas on Thursday released its first commercial real estate index for the Twin Cities, a new survey it created to measure just how local real estate professionals see things shaping up two years out.

The first official answer: not so bad. While it does not indicate any sharp turnaround in the offing, at 53.5 -- above the neutral 50 point -- the forward-looking index suggests it's not all doom and gloom out there in a "For Lease" real estate market that's been bludgeoned by the recession and financing freeze.

"This is definitely a positive sign," said Herb Tousley, director of real estate programs at the University of St. Thomas.

Tousley said he and professor Tom Hamilton created the index, which the university plans to publish every six months, because he had noticed a change in outlook on the market about six to nine months ago, and wanted to quantify it. The first results were about what he expected, he said, although it will take several more surveys to tell a real story about the local market, he said.

The e-mail survey was sent to 50 Twin Cities professionals -- investors, financiers and developers, but not brokers. It asked them to answer six basic questions about where they see fundamentals such as rents and how much equity lenders require them to pony up for deals, will be in two years. The answers are assigned values of 0 to 100. 50 is neutral -- no change. Higher numbers indicate optimism, lower numbers mean pessimism.

Tousley said he used a two-year time frame because commercial real estate projects take a long time to develop.

So, a score above 50 would indicate they see rents rising in two years -- cause for optimism among investors and developers, although not so good for tenants. In this first survey, the rent component of the index scored 60.2, meaning rents are expected to be somewhat higher in two years.

The occupancy component scored a sunny 69.4. That's higher than he expected, Tousley said, and indicates optimism about the outlook for the economy and jobs.

On the downside, building material prices scored 33.7, indicating that the panel expects prices to rise significantly, which would tend to dampen construction.

"We'll see what happen as we get more data points on this thing," Tousley said.

Jennifer Bjorhus • 612-673-4683