On Wednesday, as the World Health Organization declared the coronavirus a pandemic, Wall Street fell into a bear market as the average officially ended its 11-year rally. The Dow Jones industrial fell 20 percent off its previous high, which was set just a month ago. The market has gone through a period of extreme instability in the last few weeks as the news about the confirmed cases of the coronavirus has spread within the US.

Mike DeGiorgio, CEO of CREXi, says the instability is making it harder to ascertain values in commercial real estate.

“Stock market volatility is creating an environment of uncertainty,” DeGiorgio says. “That said, in many ways, this could benefit commercial real estate in that rate cuts have made the cost of debt capital cheaper and will cause many to seek more stable investment vehicles and hard assets.”

But are things really that stable if building occupants are struggling? As the coronavirus spreads, job losses and other economic pain are expected as well.

This is something on the minds of landlords, according to DeGiorgio. “Where some investors are perhaps feeling pause is in assessing the health of their tenants, many of whom have been impacted during this time,” he says.

These tenant struggles could hamper values.

“Value dilution today would be more so a result of forecasting future property revenue than current cap rate compression,” DeGiorgio says. “With the cost of capital decreasing as investors flock from the market to other investment vehicles, cap rates in many instances have followed or are holding steady and value loss can largely be attributed to fear of vacancy spikes or tenant distress.”

For prospective buyers, the situation is cloudy, but DeGiorgio still sees deals getting done. “There is certainly a sentiment of waiting for the storm to pass before making large investment decisions, but for reasons mentioned, the volatility has highlighted the attractiveness and at times stability of commercial real estate,” he says. Not all CRE sectors will be affected equally by both coronavirus and the ensuing stock market chaos.

“Our prediction is that hospitality will be impacted fairly quickly with travel being restricted,” DeGiorgio says. “Hoteliers are beginning to suffer and this will continue to grow if the coronavirus isn’t quickly contained.”

Other sectors will also feel some pain. “Trade has also suffered, which will impact industrial,” DeGiorgio says. “Lastly, some retailers are feeling the impact as shopping in large crowds has been restricted and travel is becoming more and more limited.”