The COVID-19 pandemic has caused havoc and pain in the real estate sector, hitting retail and hotel assets the hardest, according to data from Real Capital Analytics.
"The vast majority of the distress that appeared was related to retail and hotel properties," the report said. "Together, retail and hotel assets accounted for over 90% of all distress during the second quarter."
In comparison, the report showed, industrial fared very well, accounting for less than 1% of new distress.
The report continued: "The level of potentially distressed assets stands at over thee times that of outright distress, having leapt since March. Potential distress is more evenly distributed across the property types. Apartment assets accounted for more than 20% of potential distress in the quarter, while offices represented about 15%."
RCA went on to say that US commercial real estate transaction activity during the second quarter of 2020 "was far from the worst on record. However, the magnitude of the drop from the first quarter was unprecedented."
The report said that "evidence of distress is mounting" and that "it's clear that the pain from the COVID-19 crisis has not been experienced equally across all property types."
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Robert Storace
Robert Storace covers legal trends, lawsuits and analysis for the Connecticut Law Tribune. Follow him on Twitter @RobertSCTLaw or reach him at 203-437-5950.
