Previous Pandemic Effects on NY Commercial Real Estate
In Q1 2021, New York City experienced significant losses in commercial real estate due to the COVID-19 pandemic. As business tenants scrambled to stay in business, New Yorkers as a whole felt the pinch as many workplaces were forced to close their physical locations. Property owners remained on the hook to pay their loans even though many tenants were unable to pay rents due. Because of this, many commercial mortgages went into “special servicing” status, a designation reserved for the most distressed loans. As virus variants made their way around the world, a newer and more contagious variant became the dominant strain to start Q1 2022, Omicron.
Current Impact and Future Outlook of Omicron
Commercial real estate largely exceeded expectations in 2021, according to the National Association of Realtors (NAR) Economists’ Outlook, and is poised to continue its growth in 2022 despite Omicron. Both tenants and landlords displayed their abilities to adapt to work environments affected by the pandemic during the last year, and this trend is expected to continue. As coworking companies like WeWork saw growth, other New York City landlords became more creative in their offerings, converting vacant units into flex spaces and offering shorter-term leases. Office space is expected to continue to be available and will generally be a tenant-driven market. While Omicron will undoubtedly have its short-term effects, it is expected that the commercial real estate market in New York will continue to improve.
Interested in Commercial Real Estate?
If you're looking to purchase commercial real estate, it's beneficial to have a real estate attorney's assistance. An attorney can help you assess property value, evaluate potential property risks, and help you calculate what kind of return it can make for you. If you are facing eviction, foreclosure, or have other real estate questions, call us so we can help!
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