After an awful year for much of the real estate world, executives see full recovery not happening this year or even next, yet are optimistic about their own firms’ immediate future.
A survey of real estate executives found 85 percent see 2021 as a year of opportunity for their companies, but 70 percent said that the commercial real estate sector will not return to pre-Covid levels until at least 2023.
“You scratch your head,” said Ron Gart, a partner and chair of its Washington, D.C., real estate practice at law firm Seyfarth Shaw, which conducted the survey. “They think the rest of the economy, the rest of commercial real estate, is going to take two to three years to recover. But they’re extraordinarily optimistic for themselves. And I don’t have a good answer as to how you reconcile the two.”
The email survey drew responses from 144 owners, developers, investors, asset managers, brokers, lenders and consultants.
Their most pressing concerns were the shuttering of restaurants, gyms and other businesses; eviction and foreclosure moratoriums; and a recession in the United States.
Moreover, 90 percent believe that the shift to work-from-home will have long-term impacts on the office market, while 70 percent think the same for the residential market.
The industry was divided on the Biden administration, with 54 percent saying it will not have a positive impact on commercial real estate in 2021. (In last year’s survey, only 4 percent believed Biden to be the most favorable candidate for the real estate industry.) In 2017, more than two-thirds of survey respondents believed the Trump administration would have a positive impact on the market.
Although Biden has talked of doing away with 1031 exchanges, 62 percent of respondents did not expect tax reform to have a significant effect on the industry this year.