Commercial Real Estate is Coming Under Immense Pressure Due to COVID
The commercial real estate market is starting to implode due to COVID. The experts are warning that a record amount of store closures are coming. We also examine data showing the problems are not limited to retail stores, but across all areas of commercial real estate.
Experts predict 25,000 stores will close;
We walk through a list of the top brand closures;
Specifically, Simon Property is suing GAP for $69 million in back rent;
We discuss why back to school sales are expected to be very limited this year;
We then discuss how companies are dealing with sales downturn by drawing billions on their credit lines;
We show data on how credit lines are very low margin for the banks that provide them;
Data on delinquencies from Trepp shows that all areas of commercial real estate are being affected;
Each commercial area is experiencing a sudden hockey stick formation in delinquencies for May 2020.
It will be interesting to see how real estate reacts in a second COVID wave that many believe has already started.