Murano
Commercial Real Estate Post-COVID THE THREE STAGES OF A POST-CRISIS COMEBACK
by Grant Cardone
A lthough it has been over ten years since the finan - cial crisis of 2008, I still remember how this coun- try got completely rocked. I’ll never forget the fear and uncertainty I felt back then, wondering if I was going to have a business when it was all over. We made it through and from that moment on I realized I had to adapt my business structure and my revenue streams to withstand the next crisis. I just never imagined that it would be a pandemic that would have an even bigger impact on com- mercial real estate than the 2008 financial crisis. While the last crisis was all about credit and liquidity, the pandemic nearly wiped out the demand for commer- cial space because of work-from-home orders, shut- downs, quarantines, supply chain disruptions, unemploy- ment spikes, and a huge drop in consumer confidence. Thankfully, it looks like we are turning a corner, but commercial real estate is going to have a longer recovery than most other sectors because of the huge hit it took. How fast commercial real estate makes its comeback will depend largely on our capability to increase the speed and efficiency of virus testing and deploying the vaccines. Then we also have to see how people handle the continued need for social distancing. Finally, we will have to determine how the stimulus package will affect the situation.
Whatever happens, commercial real estate will look a lot different than it did before COVID-19. While various industries, markets, and property types will come back at different speeds, the satellite services surrounding commercial real estate like property management, archi- tecture, construction, and appraisal will become even more important as the industry adapts to the new reality. One sector of the industry that is going to have to majorly adapt is brokerage. I see the comeback happening in three stages, and the first one is happening right now. We’re already seeing increases in rent collection in industrial, office, retail, hospitality—and my favorite—multifamily. As anyone who knows me can guess, I’m particularly pleased about the bounce back in multifamily, which is registering rent collections at about 90 percent. The pandemic present- ed unique opportunities for me and my investors in the multifamily sector, with even more opportunities on the horizon. I’ve also got my eye on office space and indus - trial, which are both showing signs of promise since they can be more easily reconfigured to suit post-pandemic needs of business owners. The second stage of the recovery will happen over the next nine to twelve months but it’s going to be a slow pro-
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