Understanding the Stress in the $20 Trillion Commercial Real Estate Market

The COVID-19 pandemic has affected nearly every aspect of our lives, and the commercial real estate market is no exception. The $20 trillion commercial real estate market is showing stress, and it’s crucial to understand the impact of the pandemic on different property types.

According to a recent report by Cohen & Steers, a global investment manager specializing in real estate, certain segments of the market have been hit particularly hard. Retail properties, for instance, have been heavily impacted by the pandemic, with many retailers going bankrupt or closing permanently. This has led to an increase in vacancies and a drop in rents. Retail landlords are struggling to meet their mortgage payments, making it a tough time for investors in this sector.

Similarly, office properties have also been affected by the pandemic, with companies transitioning to remote work leading to a decrease in demand for office space. This has led to a decrease in rents and an increase in vacancies in many office markets. The trend of remote work has led many companies to reconsider their office space needs, and some are downsizing.

However, certain property types have benefited from the pandemic. Industrial properties have seen an increase in demand, as e-commerce has surged during the pandemic. As more people shop online, the need for warehouse and distribution centers has increased, leading to a decrease in vacancies and an increase in rents.

Multifamily properties have also been relatively resilient during the pandemic, as people still need a place to live, and demand for rental housing has remained strong. However, rent delinquencies have increased in certain markets, as some tenants have been unable to pay their rent due to job loss or financial hardship.

Continue Reading: https://www.cohenandsteers.com/news/where-stress-is-showing-in-the-20-trillion-commercial-real-estate-market/

 

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