Challenging Times Ahead for Commercial Property
Getting exposure to commercial property via ETFs gave investors an opportunity to get involved in a subsector of real estate without having to purchase the property itself. Nowadays, commercial property is facing challenging times with a pandemic in tow, but hopefully, a global deployment of a vaccine can reverse the sector’s fortunes.
“Even as Covid-19 cases surge world-wide, the arrival of viable vaccines holds the promise of a return to something resembling normality by the middle of next year. But the commercial real-estate sector may never get back to normal, and that could spell trouble for banks,” a Wall Street Journal article said. “Many banks are concentrated in and dependent on commercial property lending. Banks hold half of all commercial real-estate loans. The 5,000 or so U.S. community banks, with about a third of total assets, are two to three times as concentrated in commercial real-estate lending as the approximately 30 larger banks.”