Profimex Market Review Update – October 25, 2020
Hotels Could Present an Opportunity for Apartment Conversion
With hotels having been hit hard by the pandemic and many of them closing its doors permanently, a new investment strategy is arising. There already has been a trend of repurposing and converting out-of-use buildings into apartment units. With obsolete hotel buildings becoming available for a discount, those buildings could potentially be converted to apartment units as well. “Given today’s circumstances and travel restrictions, hotels might make a comeback as the favorite building type to be transformed. And, with work environments changing constantly, office buildings could become the next favorite building type to convert,” Alexandra Ciuntu of Yardi’s Rent Café.
We Probably Haven’t Seen The Worst Of The Pandemic Yet in CRE
According to several CRE specialists, the worst impact on the commercial real estate may still lay ahead of us, eight months into the pandemic. Without increased federal support and/or a rapidly available vaccine, an increased number of business closures and resulting debt delinquencies and asset foreclosures could be the result. Those asset classes being in most trouble are those ones that have already been hit hard by the pandemic, namely retail and hospitality.