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The U.S. and the world are facing a tremendous challenge; the scale of which is unprecedented in recent history. The spread of the novel coronavirus (COVID-19) is significantly changing all aspects of day-to-day life and impacting society, the economy and, by extension, commercial real estate.
The extent, length and severity of the COVID-19 pandemic is unknown and continues to evolve at a rapid pace. We have already seen entire states and countries on lockdown, rising mortality rates, widespread layoffs, and a stock market collapse into recessionary territory.
In South Florida, healthcare should be one of the few economic sectors that will gain jobs as a result of the pandemic, with accelerated hiring of medical professionals, administrators, and support staff already underway. Where these positions are located, how long they will exist, and how they will be housed while they are needed is being decided on a “real time” basis.
The healthcare industry’s demand curve may be shifted upward as a result of post-crisis policy changes. There is debate over whether the U.S. was sufficiently prepared for a pandemic. Individual states are proving to have different levels of healthcare capacity relative to the size and potential needs of their populations. These factors have been thrown into sharp relief by the coronavirus’s rapid spread.
One result may be an increase in funding and staffing for healthcare research, facilities and equipment, and preparedness planning. The impacts for the healthcare and life science industries could be positive in South Florida.
The trend toward telehealth should also accelerate, as non-critical visits to hospitals, clinics and physicians’ offices move online to minimize exposure of medical staff and limit in-person visits.
Differences in economic composition could translate into performance variations for individual metro markets. Cities that have major medical centers and/or host biotech, medical device, and pharmaceutical research clusters may well perform the strongest in this environment.
Colliers will continue to track the impact of COVID-19 across economies, markets, and real estate sectors. Across South Florida, we are providing our clients with insights to help them understand the potential impact on their business and community and recommendations on ways to minimize the impacts, where possible.
