Work From Home Has Hit Office Real Estate The Hardest In These 5 US Cities
Portfolio Pulse from Hayden Buckfire
The COVID-19 pandemic has accelerated the trend of remote work, leading to high office vacancy rates in major U.S. cities like San Francisco, Houston, and Seattle. This has negatively impacted commercial real estate, particularly office REITs such as Alexandria Real Estate Equities (ARE), BXP Inc (BXP), Hudson Pacific Properties (HPP), Cousins Properties (CUZ), and Kilroy Realty Corporation (KRC). ETFs like Vanguard Real Estate Index Fund (VNQ), Schwab US REIT ETF (SCHH), and Real Estate Select Sector SPDR Fund (XLRE) have fared better due to diversification.
July 30, 2024 | 12:59 pm
News sentiment analysis
Sort by:
Ascending
NEGATIVE IMPACT
Alexandria Real Estate Equities (ARE) has been significantly impacted by high office vacancy rates, particularly in San Francisco and Boston. Its share price is down over 18% in the past five years.
ARE's significant exposure to high-vacancy markets like San Francisco and Boston has led to a notable decline in its share price, reflecting the broader struggles of office REITs.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
BXP Inc (BXP), formerly Boston Properties, has seen its share price drop 45% over the past five years due to high office vacancy rates in key markets like Boston, San Francisco, and Seattle.
BXP's exposure to high-vacancy markets has led to a significant decline in its share price, mirroring the broader challenges faced by office REITs.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
Cousins Properties (CUZ) has seen its share price decline nearly 20% over the past five years due to high office vacancy rates in markets like Austin, Charlotte, and Tampa.
CUZ's exposure to high-vacancy markets has led to a notable decline in its share price, reflecting the broader struggles of office REITs.
CONFIDENCE 85
IMPORTANCE 60
RELEVANCE 70
NEGATIVE IMPACT
Hudson Pacific Properties (HPP) has experienced an 83% drop in market capitalization over the past five years due to high office vacancy rates on the West Coast, particularly in San Francisco and Seattle.
HPP's significant exposure to high-vacancy markets on the West Coast has led to a drastic reduction in its market capitalization, reflecting the broader struggles of office REITs.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
Kilroy Realty Corporation (KRC) has seen its share price drop over 50% in the past five years due to high office vacancy rates in San Francisco and Austin.
KRC's significant exposure to high-vacancy markets like San Francisco and Austin has led to a substantial decline in its share price, reflecting the broader struggles of office REITs.
CONFIDENCE 85
IMPORTANCE 60
RELEVANCE 70
NEUTRAL IMPACT
The Schwab US REIT ETF (SCHH) has shown resilience due to its diversified holdings, despite the struggles faced by individual office REITs.
SCHH's diversified holdings have provided some resilience against the broader challenges faced by individual office REITs, helping it perform better.
CONFIDENCE 80
IMPORTANCE 50
RELEVANCE 60
NEUTRAL IMPACT
The Vanguard Real Estate Index Fund ETF (VNQ) has fared better than individual office REITs due to its diversified portfolio, despite the overall commercial real estate challenges.
VNQ's diversified portfolio has helped it perform better than individual office REITs, providing some resilience against the broader commercial real estate challenges.
CONFIDENCE 80
IMPORTANCE 50
RELEVANCE 60
NEUTRAL IMPACT
The Real Estate Select Sector SPDR Fund (XLRE) has performed better than individual office REITs due to its diversified portfolio, despite the overall commercial real estate challenges.
XLRE's diversified portfolio has helped it perform better than individual office REITs, providing some resilience against the broader commercial real estate challenges.
CONFIDENCE 80
IMPORTANCE 50
RELEVANCE 60