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Despite the ongoing economic recovery and accelerated distribution of vaccines, commercial property acquisitions declined 59% in February as the ongoing impact of the pandemic kept investors on the sidelines.
The dollar acquisition volume declined in all property classes: office (-71%), retail (-66%), industrial (-69%), hotel (-49%) and apartment building (-33%). The acquisition volume has fallen by 53% since the beginning of the year.
In the housing market, the main drag on confidence is tenants' ability to pay current rent and missed rent payments, particularly among the unemployed, many of whom work in COVID-19 and focus on sectors such as retail, housing, leisure and Impact catering and office management services. In the office market, the effect of working from home on demand for office space remains the big question mark for investors. In the retail market, the continued rise in e-shopping remains the main drawback, although pedestrian traffic in brick and mortar stores is likely to increase once the bulk of the population is vaccinated. Consumer and business spending on room and board will return to normal once the population is vaccinated and continues to operate safely and follow safe practices to prevent infections from rebounding.
In conclusion, the commercial real estate market is still in dire straits, but with the economy continuing to receive tax and financial support and a vaccine distribution program due to be completed by the summer, the outlook for commercial real estate can only be better. not worse.