CPE 100 Survey Reveals Sober Executive Outlook

Commercial real estate executives are hunkering down for a long disruption to business stemming from the coronavirus pandemic, according to the results of the CPE 100 Sentiment Survey.

Fully 83 percent of executives surveyed expect today’s conditions to last at least six months. Of that total, 58 percent expect that normal business will take six months to return. One quarter are even more pessimistic, believing that the disruption will continue for at least one year. Only a small minority—17 percent—say that business as usual will resume as soon as three months from now.

The findings are based on a special late March survey of the CPE 100, an invited group of industry leaders representing a broad cross-section of business areas.

Impressions of the COVID-19 crisis’ potential impact on commercial real estate vary widely. A plurality, 42 percent, predict that a slowing of transaction velocity will be the most significant effect. One third say that slower leasing activity is likely to have the biggest impact.

Delayed development plans were cited by 17 percent. Availability of capital was mentioned as the most important repercussion by only 8 percent, a finding that may reflect executives’ general confidence in the real estate capital markets.

The CPE 100 is more closely divided on projections of strategies they may have to put in place. Half of respondents say that the COVID-19 crisis will lead to relatively few layoffs, while slightly more than 40 percent project major layoffs.