To say the that the current COVID-19 global pandemic has affected every economy in the world would be no understatement, and the real estate market is no exception. As if this wasn’t bad enough, difficulty in analyzing the extent of the pandemic’s longer-term effect on the market is exacerbated by the contradictory opinions from experts in the field. Altus Group conducted a survey mid-April with an update mid-June to gain better insight into real estate investor attitudes during the pandemic and looking towards the future.

Although pre-COVID investment activity was promising, this momentum came to a crashing halt just weeks after the enactment of emergency measures across the globe. When surveyed in mid-April, over half of investors had put their investment transactions on hold with approximately a third of investors considering the resumption of their activities later in the calendar year. True to their word, the majority of investors returned to the market in both the multi-residential and industrial segments. Another promising sign for the investment market is that the proportion of investors anticipating rising cap rates fell from 42% in April to 26% in June. Altus Group concluded that investor attitudes in the multi-residential and industrial investment areas are positive and view the impact of COVID-19 to be short lived in the context of an investment timeline. Unfortunately, the same conclusions cannot be drawn for shopping centres and retail investments. As people scale back their non-essential consumption, many businesses have found it necessary to defer their rents or even find themselves unable to pay it. These dramatic measures are buffered somewhat by the relative stability of the office market. These tenants tend to be larger institutions with larger cash reserves and are able to continue to use and pay for the spaces within their leases. Although operating costs from cleaning and disinfecting are higher as a result of COVID-19, these costs are at least relatively stable and can be accommodated for. For now, the balancing effects of increased working from home and increased physical distance between employees means that tenants will continue to lease the same amount of floor space, at least in the interim. On an optimistic note, it is worth noting that real estate investment horizons are measured in years, and not months or weeks. Given enough time, the situation will return to normal. To this end, many investors believe that a vaccine or cure would return the world to normal.