Green Street Advisors has released a new report titled U.S. Commercial Real Estate Cross-Sector Overview Amid Covid-19. The real estate advisory and research firm takes a look at which segments of the commercial real estate and Real Estate Investment markets have experienced the most damage from the economic shutdown caused by halt the coronavirus spread.

Green Street Advisors on COVID-19

The firm’s analysts think that Mall Real Estate and REITs will take one of the hardest hits. Many malls across the United States were already struggling due to e-commerce competition, but this could be the ned of r many malls. Green Street thinks that half of all mall-based department stores to close by the end of 2021. This could trigger co-tenancy clauses for other tenants and allow them to break or renegotiate their lease.

Power Centers are those outdoor shopping center with multiple big-box retailers, as well as an array of smaller retailers, restaurants, and other kinds of businesses. They should do better than grocery-anchored shopping centers. The grocery store anchored locations have a lot of smaller businesses and restaurants that will be particularly hard hit by the pandemic.

The office market is going to feel the impact on the shutdown as well. Concerns about near-term rent prospects and rent-paying ability are more of an issue in New York metro than anywhere else. Sun Belt and non-gateway office markets are performing much better than larger cities right now.

What’s Next for Office Space?

The real question for the office market, according to Green Street, is the long-term impact of work from home policies. The concept has been proven to work very well for many companies and could significantly reduce the demand for office space in the future.

In a typical recession, Health Care real estate usually holds up better than most sectors. As we all know, this is not a typical recession. Nursing homes and other senior living centers have experienced waves of infections and death across the United States as the virus attacked at-risk residents with fatal results.

Green Street singled out single-family rentals and industrial properties as two sectors that should hold up well and show robust performance when we can fully open the economy.

You can read the full report here.