Commercial real estate firm Marcus & Millichap (M&M) has released a special report on the coronavirus outbreak and its potential effect on finance and real estate for self-storage and other commercial real estate assets. The four-page PDF publication offers overviews of the U.S. economy, interest rates and the stock market, along with outlooks for various markets. Produced by the firm’s research-services division, it’s available for free download from the company website.
In looking at market reaction to previous pandemics such as SARS, the H1N1 “swine flu,” the “avian flu” and others, those incidents created “short-term market instability” that showed signs of stabilization within three to six months, according to the report.
“While the coronavirus will weigh on the U.S. economy in the first quarter, growth should be sustained,” analysts wrote. “Expectations of weaker exports, reduced tourism and supply-chain-related shortfalls will moderate the pace of economic growth, but low unemployment and comparatively strong consumption levels should offset the headwinds unless the outbreak amplifies significantly or confidence levels drop dramatically.”
With interest rates at an all-time low, real estate investors have a “significant” acquisition and refinance opportunity, the report states. “Real estate is a long-term investment that is particularly well-positioned to withstand financial market turbulence,” the report states.
While M&M forecasts commercial real estate to remain stable barring a major economic disruption, it’s outlook for self-storage is particularly positive. “Space demand for self-storage units will experience little if any impact from the coronavirus,” analysts wrote. “The national average vacancy rate closed 2019 at 9.9 percent, and it is expected to drift up to 10.0 percent in 2020 as the elevated flow of new facilities continues to taper nationwide.”
Marcus & Millichap produces more than 2,000 research products each year, according to company officials. Its research-services department offers a range of publications, from national economic perspectives to market-specific analyses. Its website enables users to search for reports by property type, location or keyword.
Founded in 1971, the company is a commercial property-investment firm with more than 2,000 investment professionals in offices throughout Canada and the United States. It closed nearly 9,500 transactions in 2018 with a value of approximately $46.4 billion.
Marcus & Millichap, Coronavirus Outbreak Special Report