The U.S. and the world are facing a tremendous challenge; the scale of which is unprecedented in recent history. The spread of the novel coronavirus (COVID-19) is significantly changing all aspects of day-to-day life and impacting society, the economy and, by extension, commercial real estate.

The extent, length and severity of the COVID-19 pandemic is unknown and continues to evolve at a rapid pace, sometimes changing by the hour. We are seeing entire states and countries on lockdown, rising mortality rates, widespread layoffs and an economy that is now in recessionary territory.

Some economists are anticipating a sharp bounce back for the economy that could occur as soon as Q4 2020; others feel that it could take 12 to 18 months for the impact of the COVID-19 pandemic to fully play out.

What are the implications for office real estate? Potential impacts include the following:

A clearer picture will emerge as we move through the second quarter, which will be the initial quarter to be fully impacted by the pandemic. A key factor will be the extent to which business confidence returns in the second half of 2020 and whether this will be in the context of a new pricing climate – both in terms of rents and capital values.

Colliers will continue to track the impact of COVID-19 across economies, markets, and real estate sectors. We are providing insights to help you understand the potential impact on your business and community and recommendations on ways to minimize the impacts, where possible. Please visit our COVID-19 Knowledge Leader page for resources and the latest updates.

In addition, we will shortly be publishing our latest U.S. Office Market Outlook report which will address performance and trends in the office sector in Q4 2019 and the issues and opportunities that they present.

Related Reading

CRE Market Outlook and Down-Market Strategies for Occupiers During COVID-19

COVID-19 Considerations for Occupiers

About the Author:

Stephen is the National Director of Office Research for Colliers International, where he focuses on analyzing office property trends, compiling Colliers’ thought leadership and delivering timely market projections to provide clients with a leading edge in our industry.