CRE Prices Continue Their K-Shaped Recovery
The K-shaped recovery of commercial real estate means that asset classes improve at different rates. While the industrial and multifamily sectors continue to perform well, considering the circumstances, the retail and hospitality sectors continue to slide. In between those two groups, prices in the office sector continues to fall at about 1% annually, with suburban offices, falling by as much as 1.6% since last October. However, these price declines must be considered with caution, as transaction volume continues to be low and in many cases buyers and sellers still cannot agree on the right price.
Soaring Covid-19 Cases, Lockdowns Spell Trouble for Retail
As lockdown actions are once again on the rise, caused by a second wave of high infection rates, the retail sector seems again to be the main sufferer. This comes at a bad time, as vacancy levels for retail assets spiked during the third quarter to the highest level in 20 years, according to Moody’s Analytics REIS. Further, a great help for restaurants to be able to service customers during the summer months was outdoor dining, which is now not feasible anymore in many locations with colder climates.