Our Thoughts on the State of Commercial Real Estate

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In the face of the current market uncertainty, we wanted to provide our readers with insights into trends we’ve observed in the overall commercial market, as well as our own marketplace, property database, research and analytics. We hope these insights will provide value and context as we navigate the changing landscape of commercial real estate together.

What’s happening right now in commercial real estate

We see it in the headlines: mass furloughs, cash is king, and the market waiting with bated breath to witness the impact of dozens of tenants who can’t meet their rent obligations April 1st due to the coronavirus. This widespread concern in the face of a pandemic has paused CRE activity in its tracks, as many consider the best course of action in an unprecedented time. 

Despite the headlines, we’ve noticed the emergence of some interesting trends. While the stock market’s current volatility is creating an environment of ambiguity, commercial real estate is traditionally less reactive to market conditions.

Not all asset classes will be affected equally: 


The hospitality industry is suffering from an abrupt halt on travel. Hotel occupancy rates are down 65-70% and are seeing mass furloughs: nearly 50% of hotel workers in California will have been laid off by the end of March. 

However, many sources predict a bounce-back within months of the coronavirus’ containment which has sparked a flurry of activity from opportunistic investors looking to enter the space. 


Many retailers are closing to maintain social distancing procedures as customers stay home, opting for e-commerce. Retailers such as Burlington, Gap, Macy’s, and many more are furloughing workers, while others are working with landlords to negotiate either delayed or reduced rent payments during the coronavirus pandemic. 

On the other hand, grocery stores, manufacturing plants, distribution centers, and warehouses are on a hiring frenzy to build and deliver supplies to high-demand homebound consumers.


Trade limitations and supply shortages are already impacting some industrial and logistics properties to a limited extent. 


Multifamily properties present much lower risk, thanks to the federal CARES Act and local government assistance in the face of rising unemployment rates designed to keep people in their homes. Searches for multifamily listings on Crexi have stayed consistently at 17% of total search volume since February.


Firms embracing telecommuting will likely retain a semi-permanent WFH workforce, currently at around 12% nationally and likely to reach up to 20% down the line, resulting in higher office vacancy rates. Office properties have comprised 9.5% of all activity on Crexi since February, while medical offices in particular showed a 5% uptick in buyer activity compared to less activity in other asset classes.


Specialization properties such as data centers and cell towers are seeing the least impact from the effects of coronavirus – our metrics showed only a 2% decline in buyer activity in this property type, indicating maintained interest in these recession-resistant assets. 

We continue to observe healthy interest in CRE using our internal metrics and industry searches.

Google trends show a consistent uptick through today outpacing the industry searches while our website has seen an average of over 20,000 unique site visits per day.

On March 17, 2020, we broke our record of new users added in a single day following explosive month-over-month growth in sign-ups, with over 10,000 new commercial real estate professionals added in March alone. 

We’ve also observed increased buyer interest in a selection of property types, as measured by OM downloads and broker contact. These include medical office buildings, multi-use properties, loan notes, and single-family portfolios, which we’ll explore further in this series.

Deals that were an inch from the finish line before COVID-19 are being completed, while investors are readying capital to make purchase decisions when the worst is over. Recent rate cuts have also made the cost of debt capital cheaper and will drive many to seek more stable investment options and assets. 

Here’s why it matters

 In the face of uncertainty, there’s a sense of waiting for the storm to pass. Buyer interest and discovery remains, even as deals are at a standstill. People are still interested in commercial real estate, but waiting for the dust to settle before pulling the trigger.

Activity is bubbling under the surface – we see this in recent Google searches for commercial real estate, trending upward over the past seven years and hitting an all-time high in 2020 with consistent seasonality over time.

As technology adapts to defeat the challenge of social distancing, we see more deals closing faster virtually, side-stepping the historical barriers of face-to-face interactions. When the clouds clear on COVID-19, we’ll see a reshaped commercial real estate landscape with plenty of its own opportunities ready for seizing.

Coming Up

In the coming weeks, we’ll explore some of the property types where we see active interest on our platform and dive into why it’s happening and potential opportunities in those sectors.

Stay tuned, and thanks for being part of the CREXi family.

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Shanti Ryle
Shanti Ryle

Content Marketing Manager

Shanti leads Crexi's content marketing strategies with 7+ years of content development experience, creating everything from blog posts to award-winning podcasts. Previously, she worked on content teams at Snapchat, Weedmaps, and HopSkipDrive as well as developed copy, articles, and media for freelance publications.

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