Implications for Real Estate Investors and Occupiers

Dear Clients and Colleagues,

The COVID-19 pandemic has impacted our lives like nothing ever before…. Its implications on the healthcare system, financial markets, and economy are far-reaching… and that includes commercial real estate… 

Over the past week or so I have been on the phone and video conference calls with many clients, investors, occupiers, service providers, design-builders and experts of many facets of commercial real estate, including calls with Cushman & Wakefield’s GTA and Global leadership, SIOR, etc…

I wanted to provide you with a brief update on what I have learned so far about the impact of COVID-19 pandemic, but please keep in mind that the situation is changing on a daily basis…

A Global Cushman & Wakefield Webinar provided an important overview – mainly relating to the United States – however, it is also relevant to us here in the GTA… So I decided to share some of the slides and my thoughts with you…

We all know that we are in uncharted territory, nobody has seen it before, but everyone is asking the same question: 

“How long will it last?”

So let’s start from the beginning and take a look at where we stand today…

Global Stock Indices – Source: Cushman & Wakefield Research

The stock market is in decline… and the increase over the past few days hasn’t really convinced me that this will continue to trend upwards in the short-term… we still have too many unknowns in the days and weeks ahead. 

Global Coronavirus Tracker – Source: Cushman & Wakefield Research

The number of infections on this chart is already old, and as of today, we have more than 520,000 cases globally. The United States leads the world in the number of confirmed cases, with 81,957 to be precise…. and this may grow exponentially. 

The consensus is that we will turn the corner once when we see the number of infected people in a steady decline… and the answer to that is: “Nobody knows, but hopefully soon.”

US REITS YTD Performance – Source: Cushman & Wakefield Research

What about real estate and its different asset classes?

Not all real estate is affected equally. The impact on hotels and retail has been tremendous. They have been hit the hardest, other than maybe grocery stores or drugstores.

Data centres are the only asset class in positive territory with self-storage and industrial being the least impacted… 

With most people sitting at home and ordering everything online, we will see industrial real estate coming out of this with momentum, especially with demand for logistics, warehousing, and distribution buildings.

US Real GDP Annualized Growth Prediction – Source: Cushman & Wakefield Research


It is obvious that Q2 2020 will be a disaster in terms of activity, that Q3 may show some growth, and then perhaps Q4 will see explosive growth. In my opinion, this is more or less the best-case scenario, and we shall see what plays out. 

We would need to take a look at how China, Singapore, Taiwan and to a certain point South Korea, have dealt with the crisis. Their strategies were based on social distancing, quarantine, and testing, testing and more testing… I don’t think that we are there yet. Way too many people are on the street and way too few people are being tested.

COVID-19 Impact on the Economy (mid-March 2020)

  • The trajectory of COVID-19 is uncertain, no one knows precisely how this will play out
  • Clear signals are being sent that we are in a Global recession
  • Q2 2020 is expected to be ugly, No one knows…
  • Strong Q4 2020 is still assumed, No one knows…
  • Unprecedented fiscal and monetary policy response, the world is moving fairly quickly on that
  • Hopeful signs emerging from Asia-Pacific
  • Most assume robust rebound globally in 2021

COVID-19 Impact on Real Estate (mid-March 2020)

  • CRE enters crisis in better shape than previous downturns, but obviously not immune to COVID-19 impact
  • Investors are in ‘wait and see’ mode
  • Pricing likely to soften, core to be relatively resilient
  • Construction deals hard to execute, the pipeline will slow
  • Occupiers equally in ‘wait and see’ mode

As we navigate through these uncertain times, rest assured that our team is working diligently to meet the needs of our clients and colleagues. The manner in which we do business is changing constantly, but our commitment to providing the best information and advice remains the same.

Cushman & Wakefield’s leadership team and research resources are committed to providing information on the overall economic and, specifically, the commercial real estate impact due to this pandemic. Please continue to check for the latest information regarding COVID-19 and the commercial real estate industry. 

We’re all in this together, so please reach out with any needs you may have during this time.

Please stay healthy and safe.

Best Regards,

Goran Brelih, SIOR

Senior Vice President, Broker
Cushman & Wakefield ULC, Brokerage.
Immediate Past President, SIOR – Central Canada Chapter

Office: 416-756-5456
Mobile: 416-458-4264


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