A First Look at the Impact of COVID-19 on Commercial Real Estate Prices: Asset-Level Evidence

By David C. Ling, Chongyu Wang, Tingyu Zhou. Review of Asset Pricing Studies, 2020

174 citations recorded by the source corpus.

Abstract This is the first paper to examine how the COVID-19 shock transmitted from the asset markets to capital markets. Using a novel measure of the exposure of commercial real estate (CRE) portfolios to the increase in the number of COVID-19 cases (GeoCOVID), we find a one-standard-deviation increase in GeoCOVID on day t-1 is associated with a 0.24 to 0.93 percentage points decrease in abnormal returns over 1- to 3-day windows. There is substantial variation across property types. Local and state policy interventions helped to moderate the negative return impact of GeoCOVID. However, there is little evidence that reopenings affected the performance of CRE markets.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/9cfba247672d65f53539cdab7e1142c27ab24121

Citations in the corpus

• Housing markets in a pandemic: Evidence from historical outbreaks (2020, unknown): “19 For the current pandemic, Ling et al. (2020) also document that the stock prices of REITs exposed to areas with increasing case numbers fell much more significantly in early 2020, even though stock prices recovered afterward.”
• Banking sector reactions to COVID-19: The role of bank-specific factors and government policy responses (2021, unknown): “Other studies explored the response of oil prices (Mzoughi et al., 2020; Sharif et al., 2020), corporate bond markets (Nozawa and Qiu, 2021), real estate (Ling et al., 2020), and gold (Akhtaruzzaman et al., 2021) to COVID-19.”