The pandemic-led downturn has cast a dark cloud over commercial real estate. More and more people are working from home and rentals have been under pressure as a result. Institutional investors and other large investors have historically preferred real estate investments for the stability and the predictability that they had offered. With lockdowns and social distancing norms, demand for commercial real estate seems uncertain.
However, real estate is a large industry and there are several facets to the business. If commercial real estate seems to be running into headwinds, then residential and logistics could see increased demand. According to Andrew Angeli, head of strategy and research EMEA, CBRE Global Investors, “With so many now living, learning, working and playing from home, investing in residential can accomplish multiple objectives.” CBRE subsidiaries together operate across multiple real estate segments like property leasing, sales, outsourcing, development, investment, and property management.
During the Q12020 earnings call, Chief Executive Officer, Robert Sulentic said, “Compared with the global financial crisis, we have a stronger market position across our business lines, a more diversified and contractual revenue base. A significantly stronger balance sheet with markedly more liquidity and a leadership team that is far better equipped to manage our cost structure.”
Government bond yields are trending lower and corporate bonds have also seen significant downgrading. Stock dividends and buyback programs have also been affected by the economic downturn. In such an environment, investors are looking for yields. Certain real estate segments can offer such incomes.
CBRE is a market leader in the real estate advisory and investment sectors. Recently, 3BL Media named in its list of the 100 Best Corporate Citizens. This list recognizes companies for their ESG performance. CBRE is the only real estate services firm on the list.
CBRE stock closed at $47.48 on 18th June 2020, up 25.05% for the past month.