Just like everyone else on planet earth, the commercial real estate industry has a lot of questions right now. We have just entered the month of April and will soon find out how many borrowers are able to make their loan payments and how many tenants are able to pay their lease, not to mention the millions of now under-employed multifamily housing residents and shuttered storefronts teetering on the edge of insolvency. It’s not the trend we ever wanted to have to report on but it does underscore the value of an organization like Propmodo.
Here at Propmodo we have experienced an enormous increase in readership as the real estate industry looks for information about how to navigate these extraordinary conditions. Our team has been doggedly monitoring the consequences of COVID-19 including the possibility that an economic contraction could trigger the “force majeure” clause included in many real estate contracts. The uncertainty of this dire option highlights the importance of good tenant communication which can be facilitated with emerging technologies.
The possibility of a market meltdown is particularly grim in some of the world’s most influential commercial real estate hubs including New York City where the death toll has exceeded one-thousand and brought the city’s economy to a full stop. Propmodo deputy editor, Samantha Brown is slowly recovering from COVID-19 and has been literally on the front lines observing the virus’s devastating effects there.
This pandemic has made clear that commercial real estate’s future will be defined by leaders who understand the larger context in which the industry operates. If tenants begin to break leases or default on rent, it will leave property managers without money to pay bills and landlords with less valuable real estate. The repercussions will be felt throughout the industry and the economy at large, after all real estate is the world’s largest asset class. Even though construction is the only part of real estate that’s measured by GDP, the industry affects many other areas of economic health. Declining property sales lead to declining property prices which reduces the amount of credit available to owners and slows development. A downturn in investment and development leads to higher unemployment and ultimately reduces consumer spending.
Deciphering and defining trends for global commercial real estate professionals is why Propmodo exists. Propmodo is about transformation—that shift in the future of real estate—and we are the information and intelligence brand at the center of it. We are conducting extensive research into this pandemic’s impact on industry sentiment and what commercial real estate professionals are experiencing in their business right now. Please take a minute to complete a few survey questions for us.Your confidential responses and our subsequent analysis will be incorporated into an article in a few days, which we hope will help you understand what your peers are going through and illuminate COVID-19’s influence on this industry.