5/8/2020 | By Bonnie Gottlieb
Leaders of six real estate associations and councils gathered Wednesday, May 6, 2020 to share regional perspectives on the global impact of COVID-19 on the commercial real estate sector.
The British Property Federation (BPF) hosted the webinar entitled “It’s a Small World: Lessons from Around the Globe,” featuring members of the Real Estate Equity Securitization Alliance (REESA), including Steve Wechsler, President & CEO, Nareit; Sigrid Zialcita, CEA, Asia Pacific Real Estate Association (APREA); Melanie Leech, Chief Executive, BPF; Dominique Moerenhout, CEO, European Public Real Estate Association (EPRA); Ken Morrison, Chief Executive, Property Council of Australia; and Michael Brooks, CEO, REALPAC. The conversation was moderated by Damian Wild, Editor in Chief & Publisher, EG, a UK-based real estate intelligence publication.
During the discussion, the group collectively agreed that:
- There has been a profound impact on the industry in all corners of the globe, and this time (vs 2008), it’s exclusively a liquidity crisis (instead of a solvency and liquidity crisis in 2008);
- Sectors of commercial real estate have been affected differently;
- The industry continues to educate stakeholders who may have misperceptions about real estate’s contribution to the stream of commerce;
- Sustained rent collection will be a critical piece of our global economic recovery, but in certain sectors, it has been significantly impacted. And in some places, rent has been negotiated or skirted by well-capitalized corporations and entities;
- More will need to be done to help small businesses recover;
- The industry has been active since the beginning of the global pandemic in helping respond to the public health crisis and supporting frontline responders in their communities;
- The future of work and play will look very different as businesses reopen and establish a new normal; and,
- Commercial real estate operations, how the industry is financed, and how risk is assessed and insured will evolve as well.
The tone of the conversation was measured, but optimistic for the future. Weschler commented, “I have faith in the resilience of humanity, the ingenuity of individuals, and the desire to be with each other face-to-face and not just on the glass screens will motivate everyone to get back together responsibly, safely and healthy.”
As the global industry comes together to approach an uncertain future, the group pondered how the office of the future will change; how every lease, loan document and commercial real estate agreement will be revised to reflect new thinking on risk management; how technology options will be accelerated; and how health, safety and resilience will be top of mind. All participants agreed that despite a multitude of changes that will affect all of our lives, REITs and commercial real estate will continue to house the economies of the world and will underpin solutions to the current crisis.
Additional Content for Consideration
Other facts shared on the webinar included:
- Hotels and retail have sustained large losses around the globe, while in the U.S., data center REITs are up 17% for the year through this crisis, and infrastructure REITs (powering cell phones) are up 8% through April 2020.