Question

Do you agree that the changes in the economy will have a long-term effect after the covid 19 pandemic?

Answer 1

Before the coronavirus hit, retailers, their landlords and suppliers were already reacting to several industry-wide developments, including tariffs, a change in customer demand from goods to experiences, e-commerce, and sharing. The ensuing strains inspired these players already to develop or leave. Disruption to the coronavirus actually speeds up the need to be innovative and accept new models.

A ten year commercial lease will no longer be acceptable in a single-use property. Seasonal retailers have also been experimenting with open spaces outside of the big box like markets and pop-ups. The same was achieved by office tenants via WeWork and other coworking spaces. In addition to new models and terms of contract, profit-sharing agreements have become an increasingly valuable resource to help launch new companies, withstand slowdowns and offer a return to landlords invested in the success of their tenants.

Convergence and hybridization of food retail will intensify, and will contribute to being a "revitalizing force of urban life." IKEA was already a showroom, warehouse, and restaurant for furniture. High-end grocers persuaded the shoppers to get a bottle. Increasingly, restaurants were not only dine-in, they were fast-casual or mobile food trucks. Whether by app-based delivery or through wholesalers like Costco preparing products, Americans will return to consuming most of their food cooked outside the home. Jobs in entertainment and hospitality (which includes both bars and restaurants) rose in 2017 to outnumber jobs in retail industry. The pandemic is something of a loss, but not a restart.

The food retail will only continue to rise in importance for commercial real estate and local governments. Restaurants, in whatever format, will continue to be a increasing share of tenants and producers of sales taxes, while tariffs and e-commerce oligopolies impact other storefronts. And the more Americans eat out, the closer they get to food retail would shape the market for office and residential tenants, as well as home sales.

We may see worse effects on the labor market for older employees who are losing their jobs. It took the unemployed older workers 43 weeks, on average, to find a new job during the Great Recession period, while jobs aged 35 to 44 took just 29 weeks. Those who sought a new job received greater pay cuts than younger workers: men over the age of 62 saw an average pay cut of 36 percent compared to 1.5 percent for men between 25 and 34 years of age. Also, six in ten older employees reported experiencing discrimination in the labor market for their age. These obstacles can be particularly acute in metro areas with large proportions of older employees