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Office space – If the “Shelter in Place” continues for more than a few weeks then we can see a negative impact on Office Buildings. With corporates learning and perfecting the art of working from home, companies will reduce their office space requirements.
Multi-family – In the short run C & D class multi-family could see 10 to 60 % of rent defaults from their tenants. Typical tenant profile of C & D class multi-family is tenants with a bank balance of less than $500 as they live pay check to pay check. With the huge job losses due to Covid-19 coupled with many counties banning evictions, this will result in rent defaults.
In the long run, class A and B multi-family will also have an impact if companies implement a work form home policy. The Multifamily apartment complexes in expensive neighborhoods close to work will loose tenants who no longer have to live close to their workplace.
Retail shopping centers – Retail in general is very broad and has been in the news since a while now. With many big box retailers going under this asset class has got a bad name. However, retail centers with small service oriented, e-commerce resistant tenant profiles seem to be doing fine until now. However, these centers will have a negative short term impact from Covid-19 as some retailers go bankrupt and vacancies increase slightly. But in the long run Americans will continue to go to restaurants and other retailers and therefore this asset class will bounce back.
Industrial and warehouse – Industrial & Warehouse properties will have a positive impact from Covid-19. With requirements going up from e-commerce companies like Amazon and also several other traditional retailers might convert their business to e-commerce as well.
Storage – Storage will have almost no impact from Covid-19. This is an asset class which has always proven to be recession proof and will continue to do so.