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Commercial Real Estate: The COVID-19 effect

How Has the Pandemic Impacted Commercial Real Estate?

It is generally accepted that the present pandemic will impact commercial real estate markets, but so far, some sectors (and regions) are proving more resilient than others. Do these differences represent short-term, temporary dislocations brought about by abnormal circumstances, or the acceleration of longer-term, structural shifts in occupier demand and the fundamental nature of businesses?  Only time will tell.  

The below papers contain updates from top global asset managers and consultants, who provide their perspectives on REIT performance, sector-specific effects of COVID-19, and the outlook for the broader commercial real estate market.  

CRE COVID-19

The Tipping Point: A new reality for offices? (M&G, Aug 2020)

For compliance reasons, this paper is only accessible in certain geographies

What will office spaces look like in a post-viral world, and where should investors focus their attention, given the short-to-medium term shifts (at least) that are taking place? This M&G brief describes how shifting occupier priorities are currently impacting the investible universe of office space.

The Future of Investing in New York City Real Estate (Nuveen, 2020)

Nuveen describes why New York City may provide ample opportunity for astute commercial real estate investors looking to capitalize on disparities between cities and sectors.

Challenges and Opportunities in US Commercial Real Estate (Amundi, Jul 2020)

For compliance reasons, this paper is NOT accessible in the United States

Amundi Asset Management attempts to dilineate which sectors of the commercial real estate market in the U.S. are most negatively (or perhaps positively) affected by current COVID-19-spawned economic downturn.

The Great Check Out: The hotel sector collapse (PGIM Fixed Income, Aug 2020)

The coronavirus epidemic has had dire consequences for the hotel sector, leading to all time lows in revenue metrics such as REVPAR (revenue per available room). This bears implications for CMBS with high hotel loan concentrations, but will the higher-rated tranches of this debt be able to weather the storm?

REITs: The Missing Ingredient for a Holistic Allocation (Janus Henderson, 2020)

For compliance reasons, this paper is only accessible in the United States and Canada

Unlike other asset classes, listed real estate has outperformed its private counterparts in recent years. Janus Henderson looks at REITs advantages over private core real estate funds in more detail.

Interview: Retailing in a health crisis (Aviva Investors, Aug 2020)

For compliance reasons, this paper is only accessible in certain geographies

This roundtable discussion brings together experts from Aviva Investors' equities, real asset, and credit teams to talk in depth about the retail sector — a sector already beset with thin margins and high competition.

Real Estate and ESG in a Post-COVID World (DWS Group, 2020)

This paper from DWS Group explores the role that real estate plays during times of crisis and explains why sustainable real estate principles can improve outcomes.

COVID-19 European Office Markets Series, Edition 4 (UBS AM, Jul 2020)

UBS Asset Management provides a brief update on the European office space market, including the trend towards working from home and other results of COVID-19.

APAC Real Estate Outlook (M&G Investments, Jun 2020)

For compliance reasons, this paper is only accessible in certain geographies

M&G Investments describes several structural trends taking place in the Asia Pacific real estate market, some of which are accelerating due to the effects of COVID-19.

Regional Real Estate Flash Reports (AEW, Jul 2020)

AEW's flash reports provide updates on commercial property transactions in the North American and European markets, including the impact of COVID-19 on net operating income.

Real Assets Outlook (Callan, Aug 2020)

Callan provides updates on the U.S. commercial mortgage-backed securities market, as well as U.S. private real estate and other real assets.

Perspectives in Today's Real Estate Market: Research Update (Nuveen, Aug 2020)

Nuveen provides updates on the outlook for global real estate markets, including breakdowns by region and sector, as well as projections for the remainder of the year.

What REIT Performance YTD Says About the Economy (Lee & Associates, Jul 2020)

Lee & Associates provides an update on real estate sector performance since the onset of the coronavirus epidemic along with key takeaways for REITs for the remainder of the year.

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