What might CRE look like after Covid-19?

There is no question about the effects of the Covoid-19 pandemic on Canada’s economy.

This sudden misfortune has tested the strength of the commercial real estate industry in ways we’ve never encountered before.

So what does the future hold for tenants when this is all over?

Retailers pivot

Bricks and mortar retail tenants have seen their foot traffic disappear virtually overnight.

Those nimble enough have innovated in every capacity to keep their doors open.

Be it phone orders or curbside pick up and delivery, these businesses are working overtime to make sure they can get their products to consumers.

The truly fortunate retailers are those with good e-commerce in place.

Even with a tried and tested online ordering system, however, the sales are simply not going to match more prosperous times.

With less people working there will ultimately continue to be a slow down in the buying trends of non-essentials.

Retailers able to ride out the storm would be wise to plan conservatively when ordering seasonal stock going forward into 2020.

Well after we all go back to work, I think there may be some financial restraint by consumers for the foreseeable future.

Office waiting game

Remote offices have sprung up in every household.

Even offices that were prepared to send employees home with remote desktops have still had to fine tune their day to day business.

No one was fully prepared for this type of business disruption.

I would predict some businesses are going to be using this time away from their physical headquarters to re-evaluate their office leasing needs as well as their technology demand.

Some office tenants may even contemplate physical distancing in the future in respect to open office concept design.

New buildings with higher air quality and ability to spread out employees could even cause square footage requirements to increase, offsetting the home office movement.

I wouldn’t be surprised if large corporations come out of this with even better fine-tuned business plans.

Cautiously, optimistic industrial strength

Industrial production has slowed for some businesses but certainly not all.

Supply chains are adapting daily and evolving to meet the needs of industry.

While these tenants seem the least affected thus far, they too rely heaving on supply and demand to survive.

With not much to compare against, some analysists are likening our current situation to the Great Depression.

Industry was hit hard during this time, such as little to no construction, for example.

I think there could be some lean months, regardless of which business sector you fall into, in any return to normalcy

But it will return; hopefully a heck of a lot faster than we all expect.

Posted by Kelly Macsymic

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