The Impact on the Industrial Sector of Commercial Real Estate from Covid-19
The COVID-19 pandemic is having a major impact on commercial real estate and, some say more so than the global financial crisis earlier this century. According to real estate economic and research experts, “the pandemic directly impacts the demand for space through quarantines, social distancing, shutdowns, supply chain disruptions, employment loss and a shattering of consumer confidence.”
There are so many unanswered questions, from which asset classes will be hit the hardest to how long they will take to recover? The top asset classes being tracked include industrial, office, multi-family, retail and hospitality. Will any of these emerge from the pandemic rapidly? Will specific regions will be affected more than others? Will there be permanent damage to the commercial real estate industry? How will the recovery look? Does the office sector ever back to normal? Are companies going to make official “work from home, a standard policy? Or, does the open-office concept trend change drastically? How will commercial real estate emerge from this pandemic?
One thing is for certain, the industrial asset class has accelerated even more so than before the pandemic which was booming due to the growing popularity of online shopping. Now that the pandemic has essentially forced late adapters to try the service, it has taken off and the industrial marketplace for commercial real estate is buzzing. Therefore, ensure your industrial assets are up to code and complete any seismic upgrades, structural repairs or seismic retrofits to any vulnerable industrial buildings or business parks.