Updated: May 8, 2020
On March 11, 2020, the global outbreak of a “novel coronavirus” causing a disease known as COVID-19 was officially declared a pandemic by the World Health Organization (WHO). As a result of government mandates to reduce large gatherings of people, many retail, tourism, entertainment, and service industry businesses have either shut down or reduced hours, leading to mass layoffs.
On March 27, 2020, President Donald J. Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the largest economic relief bill in U.S. history that will allocate $2.2 trillion in support to individuals and businesses affected by the pandemic and economic downturn. The impact of these events on the commercial real estate market is difficult to determine, but as time passes, the picture becomes clearer.
In April, the private sector lost more than 20 million jobs, ten times more than the previous worst month on record (September 1945), implying an unemployment rate of 15% or higher. The deterioration has been swift, as just two months earlier, unemployment was at a 50-year low of 3.5%. More economists are of the belief that the recovery will be U-shaped, and, according to Bob Michele, Chief Investment Officer for J.P. Morgan, it could take as many as ten to twelve years for the U.S. to get back to pre-pandemic level employment.
We are fully committed to understanding the mechanisms influencing commercial real estate during this challenging time. Let our experts guide you through your decision making process. Whether you need help to make an informed investment decision, advice on conversion or space planning to adapt to new needs, reliable communication with municipalities, or an appeal of your property taxes, our consultants will help you achieve the highest and best use of your needs.