Commercial landlords might need to hold on for at least three years before the system settles into a “new normal” that would permit more agreeable market conditions, according to one of the nation’s largest landlords.
Michael Cooper, Dream Office REIT CEO and Dream Unlimited president, said that he is bracing for things to get much worse before the market encounters even a hint of getting better.
“I’m planning for tough, tough times ahead, just because I think it’s prudent,” Cooper told BNN Bloomberg. “People talk about what percent of rent they got in April. That was only two weeks’ of the economic shutdown.”
With approximately 6 million square feet of office space, Cooper’s Dream Office REIT is a significant presence in Toronto’s downtown area. An alarming number of the city’s small businesses are likely to fold within the next few months due to the coronavirus pandemic, according to a recent survey.
And even an earnest initiative focused on commercial tenants and owners might not prove enough to avert the worst effects of the crisis.
“Really, 2022 is going to be a time frame where you can look at what the value of a building is and deal with it with confidence – you know what the rental rates are, what the demand is,” Cooper said. “Hopefully it will work out over time, but it won’t be working out smoothly.”