How COVID-19 can change the face of the Commercial Real Estate Market


The commercial real estate market has been upended by the COVID-19 pandemic and the long-term impacts are still to be written. The fact is that no one knows how this will play out but many have provided their views as to which impacts are expected to be short in nature and which ones are expected to have meaningful long-term implications for commercial real estate.  Human behavior is being altered every day in the current situation. What sticks and what lingers will determine the winners and losers in CRE. The hotel and retail sectors are the two most impacted corners of the CRE market. Some of the most successful and respected investors are those who ran to opportunities that at the time seemed counterintuitive but proved highly profitable. I imagine that the current situation will likely present the same potential for meaningful gains.  


Sitting here today, hotel owners and lenders are in serious trouble. Conventions, business travel, and personal vacations are off the table and it will likely take many months for people to be comfortable to travel and stay anywhere other than their home. However, the longer-term prognosis for hotels, I believe, is far more positive. People enjoy travel and look forward to it, whether it be a convention or leisure. Hotels provide escapes and new experiences that people seek out. Inferior hotel products may close or be converted to alternative uses but travel will come back and hotels with it. The hotel experience will likely look very different and the changes will add an additional cost burden to operations but if the hotel is well-located in a major market with consistent demand drivers, that hotel should be a viable investment that can provide potentially meaningful returns. The key for any current owner is to be able to hang on long enough to get to the other side of the current situation.

Brick and Mortar

Brick and mortar retail is a sector that has been spoken about ad nauseum and I will not bore you with things that you already know. People like to shop online and the process of shopping at most retail stores is painful, time-consuming, and inefficient. Retail was in pretty bad shape heading into the pandemic and this could be the impetus to push it over. I have to be careful here when I speak of retail in a broad sense. There are many different types of retail properties from malls to high-street to single-tenant to grocery-anchored. They are all facing different challenges. One overarching theme across all retail is that it is dependent on an economically healthy consumer with disposable income to spend.  With the unemployment rate approaching 20%, retail will likely suffer as wallets close, and discretionary purchases are postponed.  



Digging into the specific property types, I am personally of the view that malls are dinosaurs and their death is upon us. I also said that in 2007 and look where we are now. There are around 1200 malls in the United States. Depending on who you ask, some expect 50% of them to eventually close for good and some are calling for potentially as many as 70%. There are certain malls that are trying to adjust by incorporating a substantial mix of experiential retail like American Dream in New Jersey. This is a massive property that has a majority of its space dedicated to experiences like an indoor ski mountain, indoor water park, and indoor Nickelodeon themed amusement park, among others This playbook has worked for the Mall of America in Minnesota. It will be very interesting to see what happens with the American Dream.  

Pivoting to grocery-anchored shopping centers with a nail salon, dry cleaner, liquor store, fast food restaurant, among others, these are clearly the properties that many, including me, believe will survive and do well.  While the pandemic may alter consumer behavior to be more comfortable with online food delivery, penetration of online food shopping prior to the pandemic was extremely low. This is a clear example of short-term vs. long-term implications.  In the short term, online shopping for food is booming and likely will do well as consumers avoid people.  As normalcy returns, whether in 3 months or a year, I am of the belief that the vast majority of people prefer to food shop for themselves but may see the value of having non-perishable items delivered (toilet paper, paper towels, detergent, etc.).  

The last point I want to highlight in retail is that the expectation is that 2020 will see the highest number of store closings ever recorded. So many retailers were on shaky footing in a growing and healthy economy, let alone one where people could not leave their homes. I believe that if it was not for COVID-19, something else would have brought about the demise of the names we are all reading about, including J. Crew, Stage Stores, and Neiman Marcus, among others. The survivors will likely benefit immensely from the smaller competitor set. Like hotels, the owners have to get through the other side to take advantage

Sign up for a Yieldstreet account or follow us on social to keep up with the latest news, product updates, and content. If you are in need of liquidity, please contact our originations team at [email protected] or submit an application here: Raise Capital.

This communication and the information contained in this article are provided for general informational purposes only and should neither be construed nor intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice. Any link to a third-party website (or article contained therein) is not an endorsement, authorization or representation of our affiliation with that third party (or article). We do not exercise control over third-party websites, and we are not responsible or liable for the accuracy, legality, appropriateness, or any other aspect of such website (or article contained therein).

How helpful is this content?

Share this article:

Sign up for Yieldstreet in 3 easy steps

Sign up with your email address

Securely verify your identity and link a bank account

Verify your accreditation (if applicable) to access all of Yieldstreet’s offerings.

The Yield

Our weekly podcast providing ideas about how to make money work for you and bring you closer to your dreams.

Since inception, over $2.2B has been invested on Yieldstreet

Join today for free to access alternative investment opportunities.

1 Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All securities involve risk and may result in significant losses.

3 "Annual interest" or "Annualized Return" represents an annual target rate of interest or annualized target return and "term" represents the estimated term of the investment. Such target interest or target returns and estimated term are projections of the interest or returns and or term and may ultimately not be achieved. Actual interest or returns and term may be materially different from such projections. This targeted interest or returns and estimated term are based on the underlying investments held by the applicable.

4 Reflects the annualized distribution rate that is calculated by taking the most recent quarterly distribution approved by the Fund's Board of Directors and dividing it by prior quarter-end NAV and annualizing it. The Fund’s distribution may exceed its earnings. Therefore, a portion of the Fund’s distribution may be a return of the money you originally invested and represent a return of capital to you for tax purposes.

5 Represents the sum of the interest accrued in the statement period plus the interest paid in the statement period.

6 The internal rate of return ("IRR") represents an average net realized IRR with respect to all matured investments weighted by the investment size of each individual investment, made by private investment vehicles managed by YieldStreet Management, LLC from July 1, 2015 through and including Dec 22th, 2021, after deduction of management fees and all other expenses charged to investments.

7 Investors should carefully consider the investment objectives, risks, charges and expenses of the Yieldstreet Prism Fund before investing. The prospectus for the Yieldstreet Prism Fund contains this and other information about the Fund and can be obtained by emailing [email protected] or by referring to The prospectus should be read carefully before investing in the Fund. Investments in the Fund are not bank deposits (and thus not insured by the FDIC or by any other federal governmental agency) and are not guaranteed by Yieldstreet or any other party.

8 This tool is for informational purposes only. You should not construe any information provided here as investment advice or a recommendation, endorsement or solicitation to buy any securities offered on Yieldstreet. Yieldstreet is not a fiduciary by virtue of any person's use of or access to this tool. The information provided here is of a general nature and does not address the circumstances of any particular individual or entity. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of this information before making any decisions based on such information.

300 Park Avenue 15th Floor, New York, NY 10022


No communication by YieldStreet Inc. or any of its affiliates (collectively, “Yieldstreet™”), through this website or any other medium, should be construed or is intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice. Nothing on this website is intended as an offer to extend credit, an offer to purchase or sell securities or a solicitation of any securities transaction.

Any financial projections or returns shown on the website are estimated predictions of performance only, are hypothetical, are not based on actual investment results and are not guarantees of future results. Estimated projections do not represent or guarantee the actual results of any transaction, and no representation is made that any transaction will, or is likely to, achieve results or profits similar to those shown. In addition, other financial metrics and calculations shown on the website (including amounts of principal and interest repaid) have not been independently verified or audited and may differ from the actual financial metrics and calculations for any investment, which are contained in the investors’ portfolios. Any investment information contained herein has been secured from sources that Yieldstreet believes are reliable, but we make no representations or warranties as to the accuracy of such information and accept no liability therefor.

Private placement investments are NOT bank deposits (and thus NOT insured by the FDIC or by any other federal governmental agency), are NOT guaranteed by Yieldstreet or any other party, and MAY lose value. Neither the Securities and Exchange Commission nor any federal or state securities commission or regulatory authority has recommended or approved any investment or the accuracy or completeness of any of the information or materials provided by or through the website. Investors must be able to afford the loss of their entire investment.

Investments in private placements are speculative and involve a high degree of risk and those investors who cannot afford to lose their entire investment should not invest. Additionally, investors may receive illiquid and/or restricted securities that may be subject to holding period requirements and/or liquidity concerns. Investments in private placements are highly illiquid and those investors who cannot hold an investment for the long term (at least 5-7 years) should not invest.

Alternative investments should only be part of your overall investment portfolio. Further, the alternative investment portion of your portfolio should include a balanced portfolio of different alternative investments.

Articles or information from third-party media outside of this domain may discuss Yieldstreet or relate to information contained herein, but Yieldstreet does not approve and is not responsible for such content. Hyperlinks to third-party sites, or reproduction of third-party articles, do not constitute an approval or endorsement by Yieldstreet of the linked or reproduced content.

Investing in securities (the "Securities") listed on Yieldstreet™ pose risks, including but not limited to credit risk, interest rate risk, and the risk of losing some or all of the money you invest. Before investing you should: (1) conduct your own investigation and analysis; (2) carefully consider the investment and all related charges, expenses, uncertainties and risks, including all uncertainties and risks described in offering materials; and (3) consult with your own investment, tax, financial and legal advisors. Such Securities are only suitable for accredited investors who understand and willing and able to accept the high risks associated with private investments.

Investing in private placements requires long-term commitments, the ability to afford to lose the entire investment, and low liquidity needs. This website provides preliminary and general information about the Securities and is intended for initial reference purposes only. It does not summarize or compile all the applicable information. This website does not constitute an offer to sell or buy any securities. No offer or sale of any Securities will occur without the delivery of confidential offering materials and related documents. This information contained herein is qualified by and subject to more detailed information in the applicable offering materials. Yieldstreet™ is not registered as a broker-dealer. Yieldstreet™ does not make any representation or warranty to any prospective investor regarding the legality of an investment in any Yieldstreet Securities.

Banking services are provided by Evolve Bank & Trust, Member FDIC.

Investment advisory services are provided by YieldStreet Management, LLC, an investment advisor registered with the Securities and Exchange Commission.

Our site uses a third party service to match browser cookies to your mailing address. We then use another company to send special offers through the mail on our behalf. Our company never receives or stores any of this information and our third parties do not provide or sell this information to any other company or service.

Read full disclosure
Copyright © 2022 YieldStreet, Inc.