American Consequences - August 2020

benefited from the current pandemic, they are one of the least affected commercial investments. Over the past several months, they have seen little to no change in occupancy or delinquency. This is not altogether surprising. In fact, self-storage REITs were the only real estate asset type that produced positive returns during the 2008

what’s deemed “essential service” industries and have not only continued to pay rent during the shutdown, but many have expanded their need for warehouse space. For example, according to refrigerated- warehouse companies and online grocers, the increased demand for home delivery or in-store pick-up of groceries has created an additional need for 75 million to 100 million square feet of freezer/cooler space. Data centers, which were already a leading tenant profile in the warehouse market, have also grown in demand as data usage has increased and more people work from home. Multitenant data-center operators, for example, experienced 52-week highs through COVID-19, further cementing their place as a top-tier warehouse tenant. As a result, warehouses are now considered by many to be an investment safe-haven from the COVID-19 impact. Investors who own them, whether privately or through shares in real estate investment trusts (REITs) or crowdfunding investments, will likely see short-term increases in returns, values, and/or dividends while demand is high. The question is simply whether this trend is a short-term response to today’s economic condition or a long-term trend that’s here to stay... If the recent consumer behavioral changes and work-from-home movement become permanent developments, there could be big opportunities for real estate investors in this sector. Self-Storage While self-storage facilities haven’t necessarily

housing-market-fueled recession. As this crisis continues and record

unemployment prevails, many households will consolidate and need a place to store their belongings. Furthermore, many small businesses impacted by the shutdown will be forced to downsize or move and will need to store equipment and inventory while they get back on solid ground. As working remotely becomes the new norm for many, it empowers workers to choose where they want to live. Both short-term and long-term trends for self-storage look favorable. Currently, 90% of all self-storage facilities in the U.S. are consistently occupied. It’s also estimated that one out of every three households in the U.S. will utilize self-storage at some point in the near future. Multifamily Housing Cracks are starting to show in U.S. multifamily markets as furloughed and unemployed tenants struggle to pay rent. This will likely lead to some short-term opportunities to acquire multifamily

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