“In the first weeks and months of the coronavirus pandemic, real estate professionals were asking one question again and again: Will it be as bad as the 2008 recession?
As panic gripped financial markets amid unprecedented global lockdowns, real estate was trying to understand the extent of the downturn it might be facing. And the prospects didn’t look great.
And yet, when the big-picture data is examined, the pain for the real estate sector barely scratches the surface when compared with the Great Financial Crisis of 2008 and 2009.”
“That data is of course a broad average, and within that lies a lot of nuance: Retail real estate has fared worse recently than it did in 2008 and 2009, and for hospitality 2020 was a disaster, just as it was in the GFC. The pandemic has also exacerbated the inequality in the workforce already present along gender and racial lines.
But a human tragedy has not translated into a real estate disaster as some feared. Different sectors have become decoupled, with some, like logistics, actually benefiting from the pandemic, whereas 2008 hit almost every sector equally hard.”
“”During the Great Recession, we saw a virtual standstill in development, with the only transactions closing being the purchase of distressed real estate by vulture funds, as well as distressed debt by savvy investors,” Flores said.
By contrast, the pandemic-inspired recession of 2020 has negatively impacted only a few asset classes, such as hospitality and retail properties, Flores said, with multifamily, industrial and developable land still desirable to active developers, especially in places that are still growing, such as Texas and Florida.”
