More than half a year into the pandemic, its long-term effects seem deeper now than previously expected. As many tech giants have announced that employees will continue to work from home for at least a year, attention has inevitably been focused on the office market. In October, we learned that tech tenants are likely to shed office space in the near future, according to a Savills survey. At the same time, since office-using employment has been less impacted than other sectors, markets with a heavy technology presence performed better through this downturn and are poised for growth once the pandemic subsides, as noted in a CBRE report. In more news about the office market, a CoreNet Global survey found that commuting five days a week for a 9-to-5 workday will no longer be the norm. Additionally, we also learned that, as children returned to school in the middle of the pandemic, the return to office is ultimately tied to school reopening.
Overall, the commercial real estate industry has seen its ups and downs in 2020, with mixed forecasts ahead. SIOR’s latest survey reported that the market is clearly on a trajectory toward improvement, indicating confidence in the industry. At the same time, NAIOP’s monthly Coronavirus Impact Survey noted that while deals and rent collections have seen month-over-month progress, the office sector is facing increasing rent collection challenges. And Yardi Matrix’s Paul Fiorilla argues that the pandemic is shifting views about government intervention—and its implications for real estate.
The month’s big-dollar transactions included a $14.6 billion deal between Blackstone and a group led by existing BioMed Realty investors for Blackstone’s life sciences business, as well as Americold Realty Trust’s $1.74 billion acquisition of Agro Merchants Group. In South San Francisco, a joint venture of Bain Capital Real Estate and Phase 3 Real Estate Partners sold a life science campus that includes the nation’s tallest life science tower.
Here are CPE’s must-reads for last month: