Industrial sector is rare commercial real estate bright spot

The industrial sector appears to be the only asset class in commercial real estate poised to weather a devastating downturn caused by the coronavirus, said Rebel Cole, Ph.D., a finance professor in Florida Atlantic University’s College of Business.

Rebel Cole, Ph.D., a finance professor in Florida Atlantic University’s College of Business

Demand for distribution centers and other warehouses already was at a record high in many markets nationwide even before the coronavirus established a foothold in the United States. E-commerce companies need the space to fulfill orders from consumers who increasingly shop online – a trend that almost certainly will continue in the months ahead as people look to limit exposure to the virus.

“It’s just so much more convenient to have it delivered to your front door,” Cole said. “Once businesses open back up, I see a pretty strong recovery for industrial properties.”

But the effects on office, retail, hospitality and multifamily already have started and likely will worsen, according to Cole.

Even after the economy starts to reopen, travel will be limited until there’s a treatment or vaccine, meaning less business for hotels and resorts, Cole said.

He added that apartment developers marketing urban towers featuring shared spaces and microunits may find fewer takers as people seek more room in the suburbs.

Tens of millions of hotel and restaurant workers have been laid off, furloughed or had hours reduced. As a result, many business owners and apartment dwellers aren’t paying the rent, causing property owners to postpone their own mortgage payments.

Meanwhile, entrepreneurs and small business owners often rely on credit cards and personal savings to get by and could be forced to shutter for good, leading to large vacancies in the retail and office sectors, said Christopher Boudreaux, Ph.D., an associate professor in FAU’s College of Business. Brick-and-mortar retailers were struggling before the coronavirus, and now malls could see even smaller crowds as people avoid big public gatherings.

“The outlook for retail was negative before the pandemic but now is much worse,” Cole said. “Going forward, the coronavirus likely will change retail and office space requirements to accommodate social distancing, which would absorb a lot of newly available space.”

In the coming weeks, some offices will need to be reconfigured to put more space between workstations. But longer term, as employees demand more work-at-home concessions, businesses may need less square footage than they had before.

Just as millennials were influenced by the housing collapse more than a decade ago, “the coronavirus will be the defining event for the next generation,” Cole said.


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Drew Limsky

Drew Limsky



Drew Limsky joined Lifestyle Media Group in August 2020 as Editor-in-Chief of South Florida Business & Wealth. His first issue of SFBW, October 2020, heralded a reimagined structure, with new content categories and a slew of fresh visual themes. “As sort of a cross between Forbes and Robb Report, with a dash of GQ and Vogue,” Limsky says, “SFBW reflects South Florida’s increasingly sophisticated and dynamic business and cultural landscape.”

Limsky, an avid traveler, swimmer and film buff who holds a law degree and Ph.D. from New York University, likes to say, “I’m a doctor, but I can’t operate—except on your brand.” He wrote his dissertation on the nonfiction work of Joan Didion. Prior to that, Limsky received his B.A. in English, summa cum laude, from Emory University and earned his M.A. in literature at American University in connection with a Masters Scholar Award fellowship.

Limsky came to SFBW at the apex of a storied career in journalism and publishing that includes six previous lead editorial roles, including for some of the world’s best-known brands. He served as global editor-in-chief of Lexus magazine, founding editor-in-chief of custom lifestyle magazines for Cadillac and Holland America Line, and was the founding editor-in-chief of Modern Luxury Interiors South Florida. He also was the executive editor for B2B magazines for Acura and Honda Financial Services, and he served as travel editor for Conde Nast. Magazines under Limsky’s editorship have garnered more than 75 industry awards.

He has also written for many of the country’s top newspapers and magazines, including The New York Times, Washington Post, Los Angeles Times, Miami Herald, Boston Globe, USA Today, Worth, Robb Report, Afar, Time Out New York, National Geographic Traveler, Men’s Journal, Ritz-Carlton, Elite Traveler, Florida Design, Metropolis and Architectural Digest Mexico. His other clients have included Four Seasons, Acqualina Resort & Residences, Yahoo!, American Airlines, Wynn, Douglas Elliman and Corcoran. As an adjunct assistant professor, Limsky has taught journalism, film and creative writing at the City University of New York, Pace University, American University and other colleges.