\n<\/div><\/div>\n<\/div>\n<\/div>\n

By Jonathan Lansner<\/div><\/div>\n

The pandemic changed the way America operates and, as a result, the way commercial real estate functions. The industry seems to be thriving now \u2013 but with caveats.<\/span><\/span><\/p>\n<\/div>\n

LOS ANGELES \u2013 The buzz: Commercial property\u2019s pandemic era rebound looks relatively complete by one yardstick, the Green Street Commercial Property Price Index, which tracks the performance of big real estate investments.<\/span><\/span><\/p>\n

The trend<\/strong><\/span><\/span><\/h3>\n
It wasn\u2019t too long ago that things looked bleak for many landlords, both those who serve corporations and those who house consumers. The pandemic\u2019s economic chill made it tough for many businesses and millions of tenants to write a rent check.<\/span><\/span><\/p>\n
Well, things have changed for the overall industry as the economy \u2013 and our collective health \u2013 recovers. A price rally in July pushed Green Street\u2019s all-property index up 2.4%. That upswing moved this benchmark to its first record high of the pandemic era at 1% above its pre-coronavirus level of February 2020.<\/span><\/span><\/p>\n
Yes, it\u2019s an eye-catching rebound from a nasty 11% fall between February and July 2020 as the pandemic iced the economy. However, this is in no way a universal recovery for trusts that own and operate large properties.<\/span><\/span><\/p>\n
Of 11 real estate sectors tracked by Green Street in its monthly pricing report, six in July were above pre-pandemic values, one is even and four are still below February 2020 pricing.<\/span><\/span><\/p>\n
Last summer, a commercial real estate industry collapse was feared. This year, we wonder if some of the rebound seems too good to be true.<\/span><\/span><\/p>\n
The storylines behind commercial property\u2019s mixed performance mirror the uneven rebound of the broader economy. Note that ultra-low interest rates motivating house hunters to buy are also jazzing big-money investors to do the same with commercial properties.<\/span><\/span><\/p>\n
Let\u2019s look at price swings in the commercial real estate niche over 17 months, starting with the winners \u2026<\/span><\/span><\/p>\n
\n
Manufactured home parks<\/strong>: Shook off a 4% early loss and were 25% above pre-pandemic levels in July. Homeownership became surprisingly hot, and this is perhaps the most affordable option. That also rewarded the landlords who own the land underneath mobile homes.<\/span><\/span><\/li>\n<\/ul>\n
\n
Self-storage<\/strong>: A 5% dip early on reversed into a 24% gain in the pandemic era. These facilities do well in times of economic uncertainty as folks lose homes or are forced to double up and need a place to stow belongings.<\/span><\/span><\/li>\n<\/ul>\n
\n
Industrial<\/strong>: A 5% decline leaped to a 21% coronavirus gain as online shopping ballooned and the need for warehouse space exploded.<\/span><\/span><\/li>\n<\/ul>\n
\n
Net lease<\/strong>: These properties tend to be standalone retail properties such as drive-through restaurants and drugstores \u2013 merchants that fared very well in the keep-your-distance pandemic. Values suffered an early 8% drop but are up 15% through July.<\/span><\/span><\/li>\n<\/ul>\n
\n
Student housing<\/strong>: For-profit dorms have seen a sharp turnabout \u2013 from an early 14% plummet to a 9% gain in the pandemic era. Worries about this segment disappeared as many dorms remained rented and fears faded of extended remote learning and more lost revenue.<\/span><\/span><\/li>\n<\/ul>\n
\n
Apartments<\/strong>: The initial 10% hammering turned out to be an 8% pandemic gain. Rentals first looked sickly as tenants lost jobs and were allowed to skip rent payments. But the broad recovery helped these landlords increase rents and fill their units.<\/span><\/span><\/li>\n<\/ul>\n
\n
Healthcare<\/strong>: This sector erased an initial 7% decline. At first, high levels of COVID-19-related deaths created investor anxieties about empty beds and legal liabilities. Those worries moderated as vaccinations lowered health risks.<\/span><\/span><\/li>\n<\/ul>\n
Now let\u2019s note the losers \u2026<\/span><\/span><\/p>\n
\n
Lodging<\/strong>: It started with a horrific 25% slump that even a travel and tourism rebound could only prune to a 7% loss. One question mark \u2013 a big one for business hotels \u2013 remains. When will corporate travel return?<\/span><\/span><\/li>\n<\/ul>\n
\n
Strip centers\/retail<\/strong>: The early 15% tumble still lingers, with values 7% below pre-pandemic pricing. The sector is in a bad spot, but not nearly as ugly as their bigger peers \u2013 the malls. Coronavirus hits to restaurants and service businesses cut rent collections.<\/span><\/span><\/li>\n<\/ul>\n
\n
Offices<\/strong>: An early 9% decline essentially stuck as this niche is still 8% below February 2020. Things were looking brighter in the spring when the virus spread was in decline and vaccinations were on the rise. But the pandemic resurgence with the Delta variant puts \u201cback to the office\u201d demand on pause.<\/span><\/span><\/li>\n<\/ul>\n
\n
Malls<\/strong>: An early 20% slashing of values hasn\u2019t improved much. The sector remains 18% below pre-pandemic levels. The big shopping centers already were in decline before the virus, and the pandemic only sped up this retail niche\u2019s day of reckoning. The wild card for investors: How much is this land worth for other uses, namely housing?<\/span><\/span><\/li>\n<\/ul>\n
\u00a9 2021 The Orange County Register (Santa Ana, Calif.). Distributed by Tribune Content Agency, LLC. Jonathan Lansner is the business columnist for the Southern California News Group.<\/span><\/span><\/p>\n<\/div><\/div>\n
Go to Source<\/a>
\nAuthor: kerrys<\/p>\n","protected":false},"excerpt":{"rendered":"
By Jonathan Lansner The pandemic changed the way America operates and, as a result, the way commercial real estate functions. The industry seems to be thriving now \u2013 but with caveats. LOS ANGELES \u2013 The buzz: Commercial property\u2019s pandemic era rebound looks relatively complete by one yardstick, the Green Street Commercial Property Price Index, which tracks the performance of big real estate investments. The trend It wasn\u2019t too long ago that things looked bleak for many landlords, both those who serve corporations and those who house consumers. The pandemic\u2019s economic chill made it tough for many businesses and millions of tenants to write a rent check. Well, things have changed for the overall industry as the economy \u2013 and our collective health \u2013 recovers. A price rally in July pushed Green Street\u2019s all-property index up 2.4%. That upswing moved this benchmark to its first record high of the pandemic era at 1% above its pre-coronavirus level of February 2020. Yes, it\u2019s an eye-catching rebound from a nasty 11% fall between February and July 2020 as the pandemic iced the economy. However, this is in no way a universal recovery for trusts that own and operate large properties. Of 11 real estate sectors tracked by Green Street in its monthly pricing report, six in July were above pre-pandemic values, one is even and four are still below February 2020 pricing. Last summer, a commercial real estate industry collapse was feared. This year, we wonder if some of the rebound seems too good to be true. The storylines behind commercial property\u2019s mixed performance mirror the uneven rebound of the broader economy. Note that ultra-low interest rates motivating house hunters to buy are also jazzing big-money investors to do the same with commercial properties. Let\u2019s look at price swings in the commercial real estate niche over 17 months, starting with the winners \u2026 Manufactured home parks: Shook off a 4% early loss and were 25% above pre-pandemic levels in July. Homeownership became surprisingly hot, and this is perhaps the most affordable option. That also rewarded the landlords who own the land underneath mobile homes. Self-storage: A 5% dip early on reversed into a 24% gain in the pandemic era. These facilities do well in times of economic uncertainty as folks lose homes or are forced to double up and need a place to stow belongings. Industrial: A 5% decline leaped to a 21% coronavirus gain as online shopping ballooned and the need for warehouse space exploded. Net lease: These properties tend to be standalone retail properties such as drive-through restaurants and drugstores \u2013 merchants that fared very well in the keep-your-distance pandemic. Values suffered an early 8% drop but are up 15% through July. Student housing: For-profit dorms have seen a sharp turnabout \u2013 from an early 14% plummet to a 9% gain in the pandemic era. Worries about this segment disappeared as many dorms remained rented and fears faded of extended remote learning and more lost revenue. Apartments: The initial 10% hammering turned out to be an 8% pandemic gain. Rentals first looked sickly as tenants lost jobs and were allowed to skip rent payments. But the broad recovery helped these landlords increase rents and fill their units. Healthcare: This sector erased an initial 7% decline. At first, high levels of COVID-19-related deaths created investor anxieties about empty beds and legal liabilities. Those worries moderated as vaccinations lowered health risks. Now let\u2019s note the losers \u2026 Lodging: It started with a horrific 25% slump that even a travel and tourism rebound could only prune to a 7% loss. One question mark \u2013 a big one for business hotels \u2013 remains. When will corporate travel return? Strip centers\/retail: The early 15% tumble still lingers, with values 7% below pre-pandemic pricing. The sector is in a bad spot, but not nearly as ugly as their bigger peers \u2013 the malls. Coronavirus hits to restaurants and service businesses cut rent collections. Offices: An early 9% decline essentially stuck as this niche is still 8% below February 2020. Things were looking brighter in the spring when the virus spread was in decline and vaccinations were on the rise. But the pandemic resurgence with the Delta variant puts \u201cback to the office\u201d demand on pause. Malls: An early 20% slashing of values hasn\u2019t improved much. The sector remains 18% below pre-pandemic levels. The big shopping centers already were in decline before the virus, and the pandemic only sped up this retail niche\u2019s day of reckoning. The wild card for investors: How much is this land worth for other uses, namely housing? \u00a9 2021 The Orange County Register (Santa Ana, Calif.). Distributed by Tribune Content Agency, LLC. Jonathan Lansner is the business columnist for the Southern California News Group. Go to Source Author: kerrys<\/p>\n","protected":false},"author":4,"featured_media":5418,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/posts\/5459"}],"collection":[{"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/comments?post=5459"}],"version-history":[{"count":0,"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/posts\/5459\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/media\/5418"}],"wp:attachment":[{"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/media?parent=5459"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/categories?post=5459"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/tags?post=5459"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}