The Commercial Real Estate (CRE) industry has been affected more than most others during 2020 and the pandemic. Real Estate investors, managers and providers will be required to innovate and deploy capital creatively in order to survive and prosper. The pandemic has accelerated many trends in digitization, repurposing and use of data to improve effectiveness.
Even though 2020 was a challenging year for the CRE industry, leaders have been able to navigate with minimal impact on the viability of long-term outcome. One way to view the performance of commercial real estate during the pandemic is to break it down into three segments based on performance.
First of all, office, retail, travel and entertainment have been hit hardest. The hope for this industry is a speedy recovery for the US economy. Many operators in this segment will not be able to survive if we are not back to near normal conditions by the end of 2021.
Second, multifamily asset holders and investors have been able to keep revenue and expenses stable and are expected to continue to survive even if normal conditions do not return until after 2021. The key risk for this segment is government over-reach that places limits on ability to collect rent without providing support for the operators.
The third CRE segment includes properties such as warehouses, industrials, health care facilities, data centers and cell towers. Due to work from home and at-home deliveries, this segment