What Resources Will REITs Need To Navigate the Coronavirus Crisis?
March 25, 2020 | Calvin Schnure | Nareit
News over the past week has been worse than expected, both in terms of spread of the virus and the economic impact of measures to control the pandemic. In particular, job losses appear to be spreading from the front-line sectors (hotels, restaurants, retail, airlines) to businesses in general, especially to small- and medium-sized businesses and among hourly workers whose jobs are not suitable for telecommuting.
The jobless claims report on Thursday 26 March at 8:30 a.m. will be an important benchmark for the extent of the labor market impact. In terms of scenarios, there is probably not much chance of a “bad” scenario, only “very bad” and “worse.” Anticipating a huge spike in jobless claims, it is becoming more likely that unemployment rates rise to 10% or higher in coming months.
The main question today is how long the phase of rapid growth of infection and the economic shutdowns necessary to contain it will last. Previously there was a plausible case that these would be measured in weeks. It appears increasingly likely that it will spill into months. (Note: the current debate in Washington about whether to “open the country by Easter” does not change this timeline, as a premature end to social distancing may in fact accelerate spread of the virus and prolong and deepen the economic impact.)
