Winners and losers of NJ real estate market in the pandemic
The coronavirus pandemic has created winners and losers in the real estate industry.
According to Jeff Otteau, president of the Otteau Valuation Group, one of the big winners has been in the warehouse and distribution business, what is sometimes referred to as industrial real estate.
Otteau said with an increasing amount of shopping being done online, there's been greater demand for warehousing, "particularly in refrigerated warehousing, which is where grocery shopping comes from when you shop online.”
On the flip side are hotels, which he said have seen their business fall to "near zero."
Retail real estate also has taken a hit with indoor shopping allowed to return just two months ago. Otteau said many stores did not survive.
Otteau pointed out the shift away from physical retail shopping to online shopping was already underway but it has now been accelerated.
He said the office market sector has not seen much immediate effect from the COVID pandemic, in terms of higher vacancy or lower rents, but that's because office leases tend to be five or 10-year terms.
“Office space demand is in for a very rough ride because it looks like employers are going to allow their staff to continue to work remotely from home some of the time or all of the time," Otteau said. “In the end, that will likely be a net reduction in demand for office buildings going forward.”
You can contact reporter David Matthau at David.Matthau@townsquaremedia.com