COVID-19 will accelerate existing trends in the REIT market
The global economic effects of the outbreak of the novel coronavirus disease COVID-19 will likely accelerate and reinforce existing trends in the REIT market, said Scott Crowe, CIO of CenterSquare Investment Management, and the effects of the outbreak will vary based on property sector.
“The REIT market is definitely bifurcated between sectors that will essentially benefit and those that won’t,” said Crowe.
Retail REITs, for example, will continue to operate in a challenging environment, made even more difficult in a global slowdown and period of widespread social distancing. A number of retail tenants were already close to the brink, noted Crowe, and there will likely be additional bankruptcies.
At the same time, the warehouse/logistics sector will feel less of an impact.
“Obviously, e-commerce is a way to face shelter in place,” said Crowe. He notes an uptick in Amazon subscribers will accelerate the trend toward online shopping.