A majority of southeastern Wisconsin commercial real estate professionals predict the COVID-19 outbreak will seriously impact their business for six months or less, according to the findings of a new industry survey.
But those expectations vary when considering specific professions and level of industry experience.
Recognizing the severe and immediate impacts the global pandemic has had on the area’s real estate industry, six local industry groups collaborated on the survey, which generated nearly 350 responses. The industry groups that participated in the survery were: the Marquette University Center for Real Estate, NAIOP Wisconsin, the Commercial Association of Realtors Wisconsin, Wisconsin CREW, Building Owners & Managers Association of Wisconsin and IREM Milwaukee. The survey was conducted Monday and Tuesday, and results were published Wednesday.
The survey found that nearly 64% of respondents expected the COVID-19 pandemic and accompanying economic downtown would seriously impact their businesses for six months or less.
Specifically, 42% answered that their business would feel the effects for three to six months, nearly 21% said between one and three months, and less than 1% said their business would see no impact at all.
Nearly 25% predicted their businesses would be impacted six to 12 months, and 9% said the impacts would be felt for more than a year.
But those with more experience in the industry were more likely to expect longer-term impacts.
One-third of industry professionals with 30 or more years of experience said they expected to feel impacts for a period of six to 12 months, while nearly 27% of those with 20-29 years of experience said the same.
Andrew Hunt, director of the Marquette University Center for Real Estate, one of the groups involved in the survey, opined that the difference based on experience is likely because those who have had to slog through tough economic times want to be prepared for worst-case scenarios.
“It’s them saying, ‘We’ve seen this before, we know recovery can take a long time, and we’d rather set our expectations that way,'” he said. “It’s that old adage, if you fail to plan, you plan to fail. And the leaders in our industry are clearly stating (they) are planning for the possibility this could take a while.”
Outlook also varied by profession.
Brokers were the most optimistic group, with 77% expecting their business to be impacted six months or less. The sentiment was shared by about 69% of property managers and 66% of construction professionals.
Those most pessimistic were title insurers, attorneys and lenders. Nearly 55% of title insurers, and 46% each of attorneys and lenders, predicted their businesses would suffer from the outbreak for at least six months and up to more than a year.
Meanwhile, nearly 57% of the group consisting of developers, investors and property owners said their businesses would be impacted for six months or less.
“Our poll clearly indicates the industry is generally in a holding pattern, trying to understand the potential length of the pandemic’s impact and opting for less significant adjustments in the short term in hopes of a speedy recovery,” said Jim Villa, chief executive officer of NAIOP Wisconsin. “We’ve seen genuine collaboration resulting in conversations between the lenders and landlords, as well as the landlords and tenants. This will be key to ensuring the long-term stability and viability of commercial real estate.”