Commercial real estate business is recovering, according to NAIOP's fourth monthly survey.
An increase to 92.6 percent of respondents witnessed industrial property acquisitions, compared to 70 percent in June. However, around 52.2 percent of those surveyed stated that they had not done any business with office property in the past three weeks. Offers in the retail real estate sector also remain low. 79.6 percent of those questioned saw no business or development. However, the acquisitions of buildings in the industrial sector rose from 70 percent to more than 90 percent of the respondents from June to July.
As for rental income, the news is more optimistic. Around 75 percent of owners in the office, apartment building and industrial sectors responded that more than 90 percent of their tenants had paid their rent in full in July. This shows an improvement over April. However, rents for retail properties have improved only slightly. 51 percent stated that around a quarter of tenants had not paid their rent on time or in full.
Landlords reported that at least 10 percent of their tenants in the office or industrial sector applied for rent relief in some form, and more than 10 percent in the multi-family sector also applied for rent relief. Owners and property managers reported little changes in working with tenants on rent relief. Most offered to accept late payments or amortized rental payments or payments over a period of time. Around 71.1 percent of those surveyed asked tenants to provide evidence that they were in financial difficulties.
Around 50 percent of respondents expect the pandemic to affect their business for longer than the next 12 months, an increase of 39.7 percent in June. The increase in reported coronavirus cases in the country, delays in developing and obtaining permits, delays in funding and supply bottlenecks could all contribute to pessimism.
