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SURVEY: More Than 70% Of CRE Firms Have Seen Their Revenues Drop Significantly During The Pandemic

In early March, Bisnow surveyed hundreds of commercial real estate professionals to find out how the industry was responding to the coronavirus pandemic. At that time, 44% of survey respondents said the effects of the pandemic would be short-term, and that the market would rebound quickly, and only 37% of respondents told Bisnow the pandemic had directly affected their business.

Five months later, that sentiment has shifted to a more conservative outlook. Bisnow‘s new survey of 126 CRE professionals, conducted over the first two weeks of August, indicated growing concern about the severity of a long-term global recession.

Deal-making and investing has slowed in the wake of the pandemic, hurting the bottom line of many real estate companies — 97% of respondents said their business has been impacted in some way by the pandemic. Fifty percent of survey respondents told Bisnow their revenues have dropped between 10% and 50%, while 22% have seen revenues drop by more than 50%.

More than one-quarter (28%) said they have been forced to lay off employees.


The economic fallout caused by the pandemic has been swift and intense, reflecting shutdowns, stay-at-home orders and supply chain disruptions. Emergency government funds were deployed via the $2.2B Coronavirus Aid, Relief, and Economic Security Act in late March, throwing a financial lifeline to many small businesses.

Half of the respondents to Bisnow‘s survey applied for federal stimulus aid, and of those, 96% were successful in obtaining those funds.

Lee & Associates’ Naples, Florida, office opened for the first time in January, staffed by seven experienced brokers and two other employees. The office has been able to avoid layoffs, but business has been slower than anticipated, Vice President Michael Mahan said.

“Are we doing as well as we should or could be? No. I think it’s definitely slow, and then the land and some of the other sales are taking longer than they should, with more due diligence and extra time,” Mahan said.

When Florida began to reopen some of its businesses in early June, there was a “flurry” of real estate deal-making, Mahan said. As the number of cases began to spike later in the month, much of that activity came to a screeching halt.

“What I’m hearing a lot of now … is, will we postpone [a deal]? Or, we’re going to put it off until the end of the year, until COVID’s over,” Mahan said.

Amid falling revenues, many companies are spending money on additional resources to prepare for a prolonged pandemic. Nearly half of respondents, 47%, indicated they have already done so, while another 22% said they would consider spending that money if the pandemic continues.


The cost of construction materials is also increasing, reflecting the disruption to the global supply chain. More than half, 54%, of respondents said the cost of those materials has already increased, while another 28% said they have not seen an increase yet, but expect it to happen. That is a sharp increase from March, when 22% said construction costs had already increased.

In addition to cost, some construction materials have become harder to find. Forty-five percent said they have already had difficulty in obtaining materials, which will delay construction projects, and 30% said it hasn’t happened yet, but they expect it could if current conditions continue.

The Donaldson Group CEO Carlton Einsel told Bisnow that renovation projects have become more difficult to complete. The Rockville, Maryland-based firm buys multifamily properties, handles third-party property management, and acts as construction managers on renovation projects.

“Many renovation projects have been put on hold due to, among other things, inability to obtain an adequate return on investment. Others are delayed due to difficulties in obtaining necessary permits or materials,” Einsel said.

International investment into property sales has also taken a hit during the pandemic. About half of survey respondents, or 51%, said they have seen an impact, and they expect that trend to continue. Another 28% said that while the effects of the pandemic have reduced investment, the situation is easing, and foreign investment is returning.

Mahan noted that in the South Florida market, there are usually plenty of international investors looking to deploy capital. However, there have not been as many foreign clients looking to buy property during the pandemic.

“We still see German, we see Chinese … but that’s certainly slowed down as well,” Mahan said.

Sixty-eight percent of survey respondents said they were concerned about their business being directly impacted by reduced deal flow or foreign investment.

The industry outlook on international business expansion was more positive, with 56% of respondents indicating that while that expansion has been reduced because of the pandemic, it will only be a temporary blip.


Survey feedback indicated that CRE professionals have some mixed sentiment on governmental agencies’ response to the pandemic. Respondents were evenly split on business stimulus aid, with 44% indicating it either was sufficient or insufficient. Forty-six percent felt that personal stimulus aid was insufficient, and 47% also felt that state or local shutdown orders were insufficient.

Slightly shy of one-third (31%) said business shutdowns were sufficient, while 21% said they were overblown. When it came to face masks, 62% of respondents said that mask orders were insufficient.

However, 52% of respondents said that the implementation of eviction moratoriums, either at a federal, state or city level, have been sufficient.

Revenues for some multifamily owners are falling, reflecting rising rent delinquencies. Because of various governmental policies, The Donaldson Group has also been unable to implement renewal increases or charge certain fees, which is having a material impact on management fee generation.

“Many governmental policies, such as eviction moratoria, absolutely make sense from a public policy perspective during this health pandemic, but what we have here are private investors being asked to carry a public policy burden without meaningful support,” Einsel said.

The pandemic has also caused a sharp increase in CMBS loan delinquencies. As a result, members of the U.S. House of Representatives are planning to introduce a bill to provide cash support to CMBS borrowers.

The majority of Bisnow survey respondents, or 59%, said they might support a CMBS bailout, but that it would depend on the details of the plan. Twenty-two percent said they wouldn’t support a bailout, while 14% said they would.


Like many industries, CRE professionals have continued to adapt to changing work conditions. The majority, or 32%, said they are working from home, and expect to continue doing so at least part time. Another 19% said that their working habits have not changed and that they have either always worked from home, or continued to go into the office as usual during the pandemic.

Another 30% were working from home at the beginning of the pandemic but have now returned to the office in either full time or part time. Only 14% said they continue to work from home and expect to do so permanently.

Business travel has also changed. About half, 55%, of respondents said their company continues to restrict business travel, while 34% said their company has not. Twenty-nine percent said they will not travel at all until the pandemic is contained, and cases drop beneath a certain threshold.

Concern about getting sick was the greatest factor, according to 38% of respondents. Another 27% said events or client meetings were canceled by somebody else, while 17% said their company restricted travel.

Bisnow’s survey responses were collected between Aug. 2 and Aug. 14. The majority of survey respondents were based in California (12%), New York (12%), Texas (12%), Illinois (8%) and Georgia (8%).