O ur latest white paper examines the initial impacts of the COVID-19 pandemic crisis on commercial real estate across the United States. CRE & COVID-19 Winners, Losers & the Road Ahead, A Trends Outlook Report analyzes the effects on commercial real estate of the first three months of the pandemic crisis and the outlook for the rest of 2020 and beyond.
The paper draws on our observations as a fund administration provider, conversations with the client sponsors of real estate funds as well as interactions with partners, intermediaries and other participants in the industry. Our twenty-plus years as a fund sponsor as well as forty-plus years as a provider of fund administration services provides a unique perspective on current events in commercial real estate.
Top takeaways from the report include an analysis of differing impacts to various property types and regions of the country and what prospects for recovery in the near and short term appear likely.
- Multifamily is a sector that has shown remarkable resilience. Most renters have been keeping up with payments, but will jobs support apartment rentals going forward?
- Industrial was already a hot sector that got a further jolt from the pandemic-related rise in e-commerce. But can the new economy absorb recent industrial construction?
- Office is a sector that continues to evolve. What kind of offices will locked-down workers return to? Another round of rethinking the American office space is under way.
- Retail took a major hit from COViD-19. The prospect of shoppers returning to crowded shops and malls is a long way off. The next 12-24 months will reveal which retailers and locations can survive.
- Lodging is suffering mightily from the extreme drop in business and leisure travel. Until the public is confident in traveling, where are the opportunities in this troubled sector?
- Capital Markets. Times are uncertain and deals hard to identify, but there is no lack of capital. Lending is limited but opportunities exist and some investors are effectively raising funds.
With a perspective coming from our experience with alternative investment real estate funds, we emphasize the need for fund sponsors to be able to respond operationally to major economic disruptions with innovative solutions to fund raising, cash flow and deal acquisition that are supported by a versatile and robust back office infrastructure – a distinct advantage enjoyed by our client funds in the current economic environment.
“This kind of economic disruption is upsetting enough for everyone,” said Andrew Constantin, Senior Vice President, Operations for Phoenix American. “The last thing an investment fund sponsor needs is to be hampered in their ability to react to an economic shock by the limitations of their back office. Our clients have no such problems.”
About Phoenix American
Phoenix American Financial Services provides full-service fund administration, accounting, transfer agent and investor services as well as sales and marketing reporting to fund sponsors in the alternative investment industry. The Phoenix American aircraft group provides administration and accounting services for securitizations specializing in the commercial aviation leasing industry. The company is a subsidiary of Phoenix American Incorporated along with Phoenix American SalesFocus Solutions, providers of the cloud-based MARS CRM, Sales and Marketing Reporting and Compliance Management solutions for banks, insurance companies, asset management firms and other financial service organizations. Phoenix American was founded in 1972 and is headquartered in San Rafael, CA.