Commercial Real Estate Will Emerge OK Post COVID-19
The office and industrial real estate market will emerge OK post-pandemic according to Benjamin Tal, CIBC World Markets managing director and deputy chief economist.
During a May 5th Real Estate Forums webinar, Tal said “it’s not a recession, it’s not a depression, it’s something in-between. It’s basically a frozen economy.” Tal is predicting that the recession will be long with lots of ups and downs and will not end until there is a vaccine or treatment for COVID-19.
Commercial Real Estate Market
Many workplaces have adopted work from home mandates, leaving many office buildings sitting empty. This has many believing that there will be a collapse in office building values due to employees working from home. “I think that those who predicted that this market will collapse are overstating the damage. I don’t think that the move towards people working from home will be as dramatic as perceived, given the productivity aspect. Even if you lose 20 per cent of people working in the office, you will have to build bigger, which means that you have a situation in which the demand for space will be relatively steady or maybe reduced a little” said Tal. Tal expects employees working from home to be offset by the desire to dedicate more space to each employee as a means of physical distancing.
Click here to learn more about Tal’s Canadian real estate market predictions.
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