The New Normal for Office Marketing
Hines’ Senior Managing Director John Heagy recently described during an interview the new environment, in which leasing agents operate. While brokers are now again able to meet clients face-to-face, which they were not able to do just recently, meetings and tours are still not the same. Hines’ has mostly adopted virtual leasing tours, showing potential clients the office via zoom or other means. The pandemic has also altered the criteria of potential tenants, as these are now putting an emphasis on health, wellness, and safety. “They want a no-touch environment in terms of the facilities that they have access to, such as elevators and bathrooms,” Heagy says. “So that creates another challenge for corporate real estate executives to know exactly how much square footage they need for both the near-term and long-term, and just how much the whole work-from-home idea takes hold.”
A Wave of Distressed Real Estate is on its Way, Says NAI’s Jay Olshonsky
Jay Olshonsky, CEO of NAI Global, a NYC based Real Estate investor, claims that the impact of the pandemic on commercial real estate has already exceed that of the last financial crisis. “The immediate magnitude of this is much greater than 2009,” says Olshonsky. “Some economists are predicting this could be 20 times as bad as far as the number of properties that are affected and could potentially go into default. The numbers are pretty staggering.” However, he also mentions that “there are a multitude of side effects. For every sell there’s a buy, for every loss there’s an opportunity. There will be opportunities that will be created.”
As CMBS delinquencies have already reached 10%, it is only a matter of time until mortgages are auctioned off by lenders, presenting attractive deals to liquid buyers.