Baker Tilly’s third quarter 2020 report delves into the data and insight of the following specific sectors: multifamily housing, office, retail, industrial, senior housing and skilled nursing, and capital markets. Additionally, we include the results of a market survey regarding COVID-19 and its impact on commercial real estate.
A second quarter that was defined by crisis and uncertainty gave way to a third quarter characterized by a disjointed recovery that had definite winners and losers. Economically, lower income workers and those in the hospitality industries and others directly impacted by COVID-19 continued to struggle, while technology companies saw their valuations soar given the role technology will play in everyday life and health delivery. Through a real estate lens, the industrial sector, which had been favored over the last five years, attracted even more attention and investment as large players such as Amazon push to expand their distribution and storage networks, while retail struggles were multiplied and accelerated. The office sector remains relatively stable for now. The reality is that the future of office is still uncertain. With subleasing activity increasing, coworking companies are breaking and terminating leases while many office employees are still working out of their homes, and the future of office is murky. The senior housing sector has been on the front line of COVID-19 and has seen its share of challenges – detailed further in the report.