Real Estate Stocks Fall In Coronavirus-Related Sell-Off
The spread of coronavirus sent global markets into a tailspin Monday, and commercial real estate companies were not immune.
While the spread of the coronavirus within China had already begun impacting industries from hospitality to manufacturing, positive economic fundamentals had previously kept the stock market from falling sharply. Several economists told Bloomberg that Monday's drop can be attributed to the virus spreading outside China to countries including Italy, Japan and South Korea.
As of Monday, Italy had recorded 229 coronavirus cases, more than half of which were in the northern region of Lombardy that includes economic hub Milan, the New York Times reports. Seven people had died in Italy as of Monday, as the global death toll rose above 2,600, the Wall Street Journal reported.
Economic forecasts, including one released Wednesday by CBRE, have pointed to the hotel market as a particularly vulnerable sector of the commercial real estate industry, as decreases in Asian tourism are expected to drop hotel occupancies in major U.S. markets.
Stock market investors agreed with the bleak outlook for the hotel sector Monday, as the value of shares in hospitality companies Marriott International, Host Hotels & Resorts and MGM Resorts International all dropped more than 5%.
Brokerage firms were also among the industry's biggest stock market losers Monday, with Newmark Group, Cushman & Wakefield, JLL and CBRE all dropping by more than 4%. Some of the largest office and residential REITs were less impacted, but the stock market sell-off was felt by all segments of the publicly traded commercial real estate industry.
- Hotelier Marriott International dropped 5.87% to $134.83/share.
- Hotel REIT Host Hotels & Resorts fell 5.47% to $16.43/share.
- Hospitality company MGM Resorts International fell 5.38% to $29.70/share.
- Brokerage firm Newmark Group dropped 5.13% to $11.09/share.
- Hotelier Hilton Worldwide Holdings dropped 5.07% to $104.02/share.
- Private equity firm Blackstone Group fell 4.39% to $58.56/share.
- Brokerage firm Cushman & Wakefield dropped 4.38% to $18.14/share.
- Brokerage firm JLL dropped 4.28% to $154.30/share.
- Brokerage firm CBRE dropped 4.24% to $60.07/share.
- Industrial REIT Prologis dropped 3.25% to $95.98/share.
- Industrial REIT Duke Realty Corp. dropped 2.86% to $37.72/share.
- Office REIT Vornado Realty Trust declined 2.32% to $62.37/share.
- Office REIT Cousins Properties fell 1.83% to $41.41/share.
- Data center REIT Equinix fell 1.69% to $644/share.
- Residential REIT Equity Residential fell 1.4% to $85.79/share.
- Commercial real estate data firm CoStar Group fell 1.3% to $706.94/share.
- Commercial real estate firm Brookfield Property Partners fell 1.18% to $18.45/share.
- Retail REIT Simon Property Group dropped 1.03% to $140.78/share.
- Residential REIT AvalonBay Communities dropped 0.98% to $225.79/share.
- Office REIT Boston Properties fell 0.98% to $144.35/share.