Face-to-face Interactions, Tenant Resilience, and Commercial Real Estate Performance

65 Pages Posted: 8 Dec 2020 Last revised: 18 Oct 2021

See all articles by Chongyu Wang

Chongyu Wang

The University of Hong Kong

Tingyu Zhou

Florida State University

Date Written: July 10, 2021

Abstract

The COVID-19 pandemic has induced an exogenous shock to the face-to-face (FTF) economy and the use of commercial real estate (CRE). By linking tenants, properties, and CRE firms, we construct three novel FTF measures that capture tenant remote working, internal communication between coworkers, and external contact with customers. We find that firms holding properties with tenants that are more resilient to social distancing perform better. These FTF effects weaken over the long term. As investors are capable of compiling valuable information regarding how tenants operate at granular levels, our findings support market efficiency and shed light on post-pandemic CRE performance.

Keywords: Commercial Real Estate, Face-to-Face Interactions, Tenant Resilience, Social Distancing, COVID-19 Pandemic

JEL Classification: G01, G11, G12, G14, R30

Suggested Citation

Wang, Chongyu and Zhou, Tingyu, Face-to-face Interactions, Tenant Resilience, and Commercial Real Estate Performance (July 10, 2021). Available at SSRN: https://ssrn.com/abstract=3743818 or http://dx.doi.org/10.2139/ssrn.3743818

Tingyu Zhou

Florida State University ( email )

821 Academic Way
Tallahassee, FL 32306
United States

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