Global Public Equity – Quarterly Review


In the first quarter of 2020, the global economy stood still as lockdowns and stay-at-home orders swept across the world in response to the rapidly spreading COVID-19 pandemic. Given the unprecedented nature of mass lockdowns and quarantines in the modern economy, it is still unclear what the impact will be to the economy and real estate.

What we do know is that the near-term economic impact will be profoundly negative, as is starting to be reflected in high-frequency indicators, such as unemployment claims. Market volatility has been historically high in response, but policymakers have stepped up their responses to counteract the adverse effects. Central banks have stepped in to ensure the proper functioning of financial markets, and governments have intervened to provide stimulus to the economy during the lockdowns.

As far as property is concerned, there are a few sectors that are most acutely affected by the pandemic.

We expect real estate demand to return once COVID-19 no longer poses a public health risk

Hotels – We expected that revenue per available room (“RevPAR”) declines would be significant as travel was curtailed, but we are now seeing hotel closures aimed at saving on expenses.

Retail – Malls are seeing mass closures, but non-discretionary retail is open as essential service.

Both of these sectors have seen many companies cut their dividends and draw down their credit lines to preserve cash balances1 in response to the pandemic. Most companies have sufficient liquidity to survive for many months in the current environment, but it remains to be seen how long this environment will last.

On the positive side, the significant demand on networks and cloud services has the potential to increase already robust data center demand.

While a recession is likely, given early data points, the economy and real estate were generally in good condition prior to the pandemic. As a result of this and swift and massive monetary and fiscal stimulus, we expect demand to return for real estate once COVID-19 no longer poses a public health risk.



In light of recent events, our outlook has changed dramatically and is unclear. At this time, we know that certain property sectors will see significant disruption while others will see less disruption, and we also know that this pandemic will end. Once COVID-19 is no longer a public health risk and economic activity resumes, the commercial real estate market will also see a resumption of demand supported by massive monetary and fiscal stimulus programs around the globe.


  • Past performance is no guarantee of future results.
  • The views and opinions in the preceding Commentary are as of the date of publication and are subject to change.
  • There is no guarantee that any market forecast set forth in this presentation will be realized.
  • This material should not be relied upon as investment advice, does not constitute a recommendation to buy or sell a security or other investment and is not intended to predict or depict performance of any investment.
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  • NASDAQ is a broad based capitalization index-weighted index of stocks in all three NASDAQ tiers: Global Select, Global Market and Capital Market. The Dow Jones Industrial Average is the measure of the performance of 30 “blue-chip” stocks, considered the leaders of the market. The S&P 500 Index is an unmanaged index generally considered to be representative of the large cap segment of the market. The Russell 2000 Index is comprised of the smallest 2000 companies in the Russell 3000 Index, representing approximately 11% of the Russell 3000 total market capitalization. The Dow Jones Utility is price-weighted average of 15 utility companies that are listed on NYSE and involved in production if electrical energy. The MSCI World Index is free-float weighted equity index which include developed world markets. The FTSE EPRA/NAREIT (Europe Public Real Estate Association/National Association of Real Estate Investment Trusts) Index is a total return performance index of all equity REITs tracked by FTSE EPRA/NAREIT. The Indices are presented for illustrative purposes only and are not intended to imply Heitman’s past or future performance. The performance of the Indices assumes dividend reinvestment, but do not reflect transaction costs, advisory fees, custodian fees, trading costs and other costs of investment. Individuals cannot directly invest in any of the Indices described above.