Commercial Real Estate in a Nation of Lockdowns

55 Pages Posted: 2 Apr 2024 Last revised: 13 Nov 2024

See all articles by Rebel A. Cole

Rebel A. Cole

Florida Atlantic University

Jason Damm

University of Miami

Date Written: November 01, 2024

Abstract

When the COVID-19 virus began to spread across the United States during early 2020, in an effort to contain its effects, the federal government delegated certain decisions regarding how to restrict citizen mobility and economic activity to state and local government officials. This delegation created a staggered environment of restrictions throughout the nation, which ultimately had varying consequences for local markets. We exploit the variation in government-implemented COVID-19 restrictions and citizen mobility trends at work and retail locations to test how commercial real estate properties performed across commercial real estate markets and property types. Using quarterly data on a large sample of commercial properties, we examine how restrictions and mobility impacted valuations and income performance, particularly for the four major property types – apartments, industrial, office, and retail. In general, we find that government restrictions had negative effects on returns at apartment, retail, and office properties, with retail suffering more than apartments, and office suffering more than retail. In contrast, government restrictions had positive effects on performance at industrial properties.

Keywords: commercial real estate, COVID-19, NCREIF, pandemic

JEL Classification: G18, G23, R3

Suggested Citation

Cole, Rebel A. and Damm, Jason, Commercial Real Estate in a Nation of Lockdowns (November 01, 2024). Available at SSRN: https://ssrn.com/abstract=4780527 or http://dx.doi.org/10.2139/ssrn.4780527

Rebel A. Cole (Contact Author)

Florida Atlantic University ( email )

College of Business
777 Glades Road
Boca Raton, FL 33431
United States
1-561-297-4969 (Phone)

HOME PAGE: http://rebelcole.com

Jason Damm

University of Miami ( email )

5250 University Drive
Coral Gables, FL 33146
United States
(941) 587-9425 (Phone)

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