COVID-19 and Implications for Logistics Real Estate
In our interconnected world, significant disruptions underscore the need for resilient supply chains. The risks posed by COVID-19 to economic growth would likewise affect real estate in the near term; on both counts the magnitude is yet unknown. Still, structural trends point to resiliency for logistics real estate through this period and beyond, shaping both the fundamental and investment landscape. COVID-19 has become a catalyst for many to find workarounds that could become permanent, leading to lower demand in certain property sectors (e.g., telecommuting/office, e-commerce/retail). This volatility could translate to higher demand for logistics real estate (inventories, e-commerce, industry 4.0). As these trends become broadly realized, capital markets are likely to react quickly and, in turn, reflect this differentiation in valuation and investment performance.