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Moody’s Forecasts 11% Drop in Retail Rents

Moody’s Analytics issued new forecasts for commercial real estate rents and vacancies, covering eight property types. Of these, retail—already pressured by the rise of e-commerce even before the COVID-19 crisis and now burdened with wide-scale store closures—is expected to be affected worst.

National vacancies will rise past historic highs, with effective rents projected to fall by 11% in 2020. This drop will constitute almost twice the total decline in rents the retail property sector experienced after the Great Recession between 2008 and 2011.

“The COVID-19 pandemic has prompted unprecedented challenges in the economy, and multifamily and commercial real estate markets are changing rapidly as a result,” said Victor Calanog, head of CRE economics at Moody’s Analytics. “Store closures have made it difficult for retail tenants to pay rent, which has negatively impacted landlords. It is not yet clear how effective government support will be in this sector.”

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About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).

  • ◦Economy
  • ◦Lease
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