Recent Drops in Market Liquidity May Foreshadow Major Drops in US Commercial Real Estate Markets
14 Pages Posted: 20 May 2020 Last revised: 11 Nov 2020
Date Written: May 18, 2020
The study quantifies liquidity impacts measured by the Demand-Supply Gap in terms of asset pricing implications for US private commercial real estate markets of the COVID-19 crisis. So far (using data up to April 2020), New York is hardest hit among the eight metros examined, with a predicted average price drop between 19 and 30 percent, reflecting a drop in liquidity already three-quarters of the total liquidity drop that occurred in the entire Global Financial Crisis of 2008-09. Among property sectors nationwide, retail is hit hardest with 14 to 19 percent predicted price drop and liquidity down already almost 60 percent as much as it dropped in the entire GFC.
Keywords: Liquidity, Commercial Real Estate, COVID-19, COVID, Coronavirus
JEL Classification: R30, G12
Suggested Citation: Suggested Citation