By Michael Tucker
The real estate impact of coronavirus will likely be limited in the short-term, but it could grow should the virus aggressively spread, analysts said.
CBRE, Los Angeles, noted the number of people infected by COVID-19, also known as coronavirus, was nine times higher as of Feb. 18 than the SARS epidemic was in 2003.
“Infections are expected to peak sometime in March,” CBRE said in its Potential Impact of Coronavirus on U.S. CRE Industry report. “Short-term commercial real estate impacts likely will be in the hotel sector and some retail centers in markets frequently visited by Chinese tourists, such as San Francisco, Los Angeles and New York City. If fear over travel and shopping spreads to U.S. citizens, the impacts to the hotel and retail sectors will be more pronounced.”
CBRE noted additional “downside potential” if coronavirus causes longer-term disruption to China’s economy. For example, infection fears could cut discretionary business and leisure travel. If large meetings and conventions are cancelled, hotel operations could see “significant disruption,” the report said.