Real Estate: Barbara Corcoran Talks Changes In Commercial Demand
Commercial real estate markets have been severely impacted by the economic shutdown caused by the coronavirus.
Barbara Corcoran, Shark Tank judge and founder of the Corcoran Group, a New York-based residential brokerage, told Yahoo! Finance today that some of these changes may be permanent.
Barbara Corcoran on RE
Corcoran said in the interview that “It is going to bring down the value of all commercial real estate overnight. I really don’t believe we’re going to go home to what we had before. It’s totally changed.”
Ms. Corcoran thinks that office demand may decline after the economy is back up and running.
Many companies have been able to function with the workforce working remotely from home. She thinks that many people will want to continue doing so after the shutdown to avoid the hassle of commuting. Companies may embrace the idea and look to renegotiate leases on smaller spaces.
She thinks that the hardest hit sector will be shopping centers. She noted that they were standing on one leg thanks to e-commerce when this happened, and that leg has now been kicked out from under them. We have already seen many retailers and restaurants withhold rent payments in April, and it is unlikely that they will be able to make payments until the economy is fully open.
Ms. Corcoran does think the decline will create opportunities. She said, “Because then they’re [the educated buyer] in the position to actually recognize a sweetheart deal when they see it. And if they pounce on it, they’re going to get the deal of a lifetime. Every real estate cycle that has gone up and down, the deals weren’t made in the down cycles, nor in the up cycles. They were always made in the times where there’s the greatest uncertainty where everybody’s guessing.”
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