New figures show the commercial real estate industry in Los Angeles County has been especially hard hit by the COVID-19 pandemic, reportedly seeing an 80 percent decrease in sales in May over the previous year.
Following about $1.66 billion in sales in May of 2019, commercial real estate business in L.A. County dropped to $332 million worth of transactions this year, the Los Angeles Business Journal reported Monday, citing data provided by Newmark Knight Frank.
While some significant deals have gone through in May and June, the vast majority of them were already in the works prior to the onset of COVID-19, experts said.
New sales have slowed to a snail’s pace.
Pasadena’s market has essentially mirrored the situation county-wide, said John Martin, who serves as senior vice president at Pasadena-based commercial real estate firm Kidder Matthews.
“There’s not a lot that’s in escrow now,” he said. “Post-COVID, we just haven’t seen things going into escrow.”
“It’s really all stuff that has been in escrow prior to and is now closing. And it’s very alarming as a commercial real estate broker for sure,” Martin said.
And even those who are trying to purchase properties are not finding it to be an easy time to do so, he said.
He recalled one property that was currently in escrow.
“The buyer was using (U.S. Small Business Business Administration) lending, and they made him jump through hoops of fire, then jump through another hoop of fire. It was unfortunate that they weren’t willing to be more forgiving and more cooperative with the buyer,” Martin said.
For the time being, the immediate future of the commercial real estate market seems to hinge on the unpredictable trajectory of the coronavirus, he said.
“It is concerning for sure, and everybody’s still on that pause button on everything from this pandemic. We haven’t seen the ripples start to come out yet.”