Why commercial real estate pricing will take longer to notice changes, although some are already projecting price corrections:
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First, we work through the rent/mortgage relief requests for approximately 1-3 months.
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Then, we wait to see which of those companies really weren’t able to survive; could be another 2-3 months.
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From there, we take inventory of how much real estate is given back as vacancy; could be 1-2 months.
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Then we see which innovative and opportune companies took advantage of this downturn and end up needing more real estate due to growth opportunities that came about.
If the vacancies outweigh the absorption by a significant amount and property owners feel pain in their portfolios then we will see prices change. Otherwise, we continue on.
There are so many factors that could change along that path over the next couple months that this is a fluid assessment that could be 100% wrong in 2 weeks. We shall see….
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