What's the Latest with the Commercial Real Estate Market
April 16, 2020
To dive deeper into the state of the commercial real estate market and the economy here and abroad, keep on reading. (We have graphs!)
TL;DR - The coronavirus and its negative effects on our health and economy won't go away any time soon. But, it's not all bad news.
Part I: At-Risk Jobs in Tampa Bay
The most important thing we can do when it comes to protecting our economy is to slow and ultimate stop the spread of the coronavirus. One of the best measures to slow and stop the spread of the virus is via social distancing and closing non-essential businesses. Yes, this will take an immediate toll on those non-essential business owners and employees, but it will be better for the longer-term economic prospects of all industries.
But, how seriously will these short-term disruptions impact these businesses and industries that are most at-risk during this economic downturn? The 2020 Tampa Bay Regional Competitiveness Report and the Brookings Institute examined this and released this chart:
The chart above indicates that out of 20 select metros around the country, the Tampa Bay area is 7th when it comes to these most exposed jobs. At-risk and most-exposed jobs include jobs in the retail, oil & gas, transportation, employment services, travel, leisure, and hospitality sectors. Nearly 30% of all workers in Tampa Bay work in these select industries. While the Tampa Bay area fares best among the other large metros in the state of Florida, nationwide it still lags behind.
Part II: Coronavirus in Tampa Bay
From the State of the Region 2019 Community Report, Florida recently surpassed 20,000 confirmed COVID-19 cases. In Tampa Bay, it appears to be flattening the curve on new infections, and doing it more successfully than other major Florida metro areas. The Tampa Bay region is adding new COVID-19 cases at a significantly slower rate than other major metro areas. Tampa Bay is the only major metro area to decrease its share of statewide cases. Tampa Bay has fewer new cases per 100,000 residents than any other major metro area.
The graph above represents the cumulative number of cases in each metro region in Florida since the beginning of March 2020. With 2,030 confirmed COVID-19 cases as of April 10, 2020, the Tampa Bay region currently ranks second in the state for the number of total cases. However the metro area is adding them at a significantly slower rate than the other metro areas in the state. While the goal is still 0 total cases, this is promising news that efforts by Tampa Bay businesses and residents to "flatten the curve" is working.
Part III: Household Spending
In the United States, the beginnings of the coronavirus pandemic started to creep into everyday life in the early part of March 2020. As news of the spreading of the virus picked up steam, more and more Americans stocked up on essential (and non-essential) household items.
But, from the graph above, we can see that in the month of April, household spending drastically decreased. This is due in part because several millions of Americans were laid off from work and there are fewer businesses open and available to spend money at. Since consumer spending accounts for nearly two-thirds of our GDP, it is important to watch these numbers as they will be a good indicator for when and how quickly the country will feel ready to re-open.
In speaking with one medical professional at the front line of testing and fighting the coronavirus in the Tampa Bay area, he believes that hospitals and health care facilities will see the highest surge of new patients into Tampa Bay hospitals during the last week of April and the first week of May. It is also highly unlikely that schools will reopen their doors to in-person classrooms for the remainder of the 2019-2020 school year.
This means that we should not expect a "return to normal" for at least six to eight more weeks. And even then, say around the beginning of June, we should expect to see a very slow return to economic output levels as we saw in January 2020.
Here's to the fundamentals.
Based in Downtown Tampa, Fla., Nico Hohman is an award-winning real estate broker, business growth and workforce housing advocate. Nico currently serves as the Director of Commercial Real Estate with Tomlin Commercial. Mr. Hohman was the Founder of Hohman Homes and HHRG, residential and commercial real brokerages based in Tampa Bay with over 30 employees. Nico is the Chairman of the Hillsborough County Historic Resources Board; a Director at Stellar MLS in Orlando, Fla.; and a former member of the Board of Directors at Greater Tampa Realtors. Schedule a time for Nico to speak to your brokerage, company, or association by connecting with him on LinkedIn.