Despite Pandemic Damaging Economy, Real Estate Industry Leaders Remain Optimistic
The rapid outbreak and spread of COVID-19 took many businesses, communities and governments by surprise. While the immediate health of employees is the chief concern, leaders in commercial real estate have started to address the impact of the virus on transactions in the coming year.
Many full-service commercial real estate firms have established coronavirus resource pages on their websites, which include market research related to the virus. Some industry leaders distributed personal statements to their clients and partners that they will continue to offer their services through the health crisis and economic interruption.
Rich Handler and Brian Friedman, CEO and President of Jefferies Financial Group respectively, expressed optimism and stressed that all companies and individuals should prioritize health, safety and emotional well-being of employees. Jefferies Financial Group jointly owns Berkadia together with Berkshire Hathaway. Handler and Friedman also noted that a large and non-partisan intervention from the federal government will be required to repair the economy, such as the $2 trillion stimulus package recently passed by both houses of Congress. The Jefferies leaders also noted that businesses should not forget the lessons learned from this interruption.
“The one thing we can assure each of you is that we will not soon be returning to the period of low volatility, calm correlations and an overriding sense of security and calmness,” Handler and Friedman wrote in a letter. “In a way this is good, because top-quality strategy, decisions and execution will matter more than ever going forward, as it was hard to truly differentiate oneself in operating a company or managing money when the sea of calmness lifted all boats.”
Brett White, Cushman & Wakefield executive chairman and CEO, reassured clients that the global firm is still offering services through the business interruption, with adjustments adhering to social distance recommendations.
“Our professionals, working hand-in-hand with our clients, are finding ways to manage through these difficult days by modifying meeting protocols and touring properties with smaller groups,” wrote White. “At the same time, we are adhering to important public health restrictions and recommendations.”
White also noted that Cushman & Wakefield employs more than 20,000 professionals in China, where this coronavirus outbreak originated, and that the rate of infection seems to be dissipating there.
Tim Pulte, senior vice president at Colliers International, says that with the proper government intervention now, the passing of the virus will see things get back on track. Colliers believes that once the virus has cleared and people are able to go back to work, the real estate market will pick up speed again and will not experience any long-term fallout.
“It’s easy to make comparisons with the financial crisis of 2008 and 2009, but the reality is that without the interruption of the virus, the economy was in good shape,” says Pulte. “While there has been a slight pause as people take in the ramifications of the pandemic, the reality is that unlike previous market downturns, the economy three weeks ago was fundamentally sound.”
— Alex Patton