It’s no secret that commercial property — think buildings, mixed-used and more — values have changed in the last six months due to the pandemic and real estate is currently in unchartered territory.

This is according to the president of commercial real estate brokerage NAI Pleasant Valley, Alec Pacella, who recently spoke at the 2020 REALTORS Conference & Expo.

COVID-19 Impact

Pacella, who hosted a session titled, “Selling CRE Properties: How COVID-19 Impacts the Numbers,” summarized the recent history of the commercial real estate industry, including its pricing index, value peaks, and buyer expectations.

“We’ve had a great run over the last six or seven years,” Pacella said of commercial real estate investment in a NAR news release.

“In the early part of last decade – 2006, 2007, 2008 – expectations were actually greater than the pricing index. There was more demand than there was supply.”

But in 2009 and 2010, as Pacella notes, expectations were lower than the pricing index. As a result, investments in commercial real estate were nearly nonexistent.

“No deals were happening then,” he said. “You couldn’t give real estate away in a lot of markets because the expectations were so low.”


The scenario Pacella describes is not unlike the current state of commercial real estate, as many landlords of once-profitable businesses have watched popular chains struggle or be forced to permanently close their doors.

Pacella said the key to navigating this market is for property owners and investors to keep a dialogue. And because of the market’s cyclical nature, Pacella said investors will want to be in a position to capitalize when conditions eventually improve.

“In an uncertain market, it’s critical to keep conversations going.” Having a strategy to engage in open conversation, he said, could eventually lead to a deal in the future.

Up and Down

In the commercial real estate arena, transactions can take place when markets are going or going down, according to Pacella.

“We could sit there and sit on our hands and say ‘we’re out of business; come talk to me in 2021, 2022 when things get back.’ No, that’s not what we do, that’s not how most of us are wired.”

The National Association of Realtors is considered to be America’s largest trade association, representing more than 1.4 million members involved in all aspects of the residential and commercial real estate industries.

Source: NAR