The real estate industry is looking grim as retailers close down operations, hotels remain ghost towns and coworking firms see their members dwindle down.
“The worst case is that we get lulled into a sense of, ‘Oh gosh, it’s going to be OK.’ and then come the fall we get a huge second wave that is larger than what we’ve gone through,” said Kate Newlin, a retail consultant. “I think that just decimates everything. Whatever tricked out consumer confidence was starting to resemble gets whacked up the side of their head.”
Confidence continues to be depleted and some even expect the economy to remain unstable until 2022.
Office properties have long been seen as the safe haven of the real estate world, but now that tenants have been unable to pay rent and companies are wrestling with the idea of downsizing their footprint or getting rid of offices altogether, they could be in big trouble. Large companies like Twitter have already allowed their staff to work remotely permanently if they please, and a Kung Group survey of over 500 startup founders revealed that 66% of respondents will be downsizing or eliminating their office.
Companies that do require physical space will turn to cities with cheaper real estate, doing away with long commutes into dense cities.
For coworking providers that operate on long-term leases, several will likely look into giving back their spaces which will cause landlords to take a big hit.