April 09, 2020

What you need to know on Covid-19's impact on US real estate

Bert Crouch. Managing Director, Head of North America Invesco Real Estate, William C Grubbs Jr. Chief Investment Officer, Invesco Real Estate and Mike Sobolik. North American Research Strategist, Invesco Real Estate

What you need to know on Covid-19’s impact on US real estate

Here are the most important things that we want you to hear from us about the impact of COVID-19 on US real estate conditions and our investment posture as your fiduciary:

  • We expect further disruption in the US economy due to COVID-19 in the form of employment losses and savings erosion
  • We expect that the disruption spurred by COVID-19 will lead to some degree of real estate market dislocation, which might afford access to assets that usually would not be available
  • Furthermore, the relationship between price and risk may become misaligned and could lead to recapitalization opportunities
  • Our pre-COVID strategic approach of being defensive against cyclical headwinds and offensive toward long-term convictions has positioned us well for the current crisis
  • Therefore, we intend to be mindful of short-term headwinds as we act on our long-term convictions
  • Pricing scrutiny is heightened, thus we are maintaining our investment disciplines.
  • COVID-19 has reinforced Invesco Real Estate's convictions regarding long-term tailwinds
  1. We expect technology trends to reinforce better relative performance for the industrial sector and offices located in innovation hubs
  2. We expect demographic trends to drive strong demand in the life sciences sector and medical offices catering to high-acuity tenants
  3. We expect financial market disruption to reinforce demand for rental housing, even as millennials approach ages traditionally associated with much higher home ownership

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  • The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested. Property and land can be difficult to sell, so investors may not be able to sell such investments when they want to. The value of property is generally a matter of an independent valuer’s opinion and may not be realised.

  • Past performance is not a guide to future returns. The views and opinions expressed herein are those of Invesco Real Estate professionals based on current market conditions. They are not necessarily those of other Invesco professionals and are subject to change without notice.

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