Last week Boston Fed President Eric Rosengren was interviewed by Bloomberg for his thoughts on how the pandemic will affect commercial real estate. The Fed, as it happens, already weighed in on the subject last month, noting in its bi-annual Financial Stability Report that CRE may undergo substantial repricing due to the economic disruption caused by the pandemic.

In his interview Rosengren spoke of the major shift the industry is expected to see as a result of the pandemic, honing in on the changes that will result from an expected permanent shift to remote work for many companies.

The office sector, obviously, is expected to feel the effects, but Rosengren raises another asset class that could find itself struggling with this trend as well: downtown multifamily.

"I do think some multifamily housing in downtown areas will be more challenged as Americans rethink whether they want to live downtown or in the suburbs," he told Bloomberg.

Many could well prefer, he said, to live in larger homes that had room for home offices in the suburbs if they don't have to commute.

The suburbs are clearly on their way to becoming a favored asset class for offices for similar reasons. Companies that don't want to cram employees into headquarter offices are considering smaller, satellite offices in the suburbs closer to where their employees live. Microsoft, to name one example, recently signed a 400,000-square foot lease in Reston, Va., with Boston Properties in an expansion of its smaller nearby space.

And, of course, many companies have already gone public with their plans to allow some, if not all, of their workforce to continue working from home now that it is clear that this doesn't hurt productivity.

Meanwhile, there is supporting data for Rosengren's prediction about workers' preference for home offices. Most Americans working from home say they'd consider a move if allowed to work remotely long-term, according to a new Zillow survey, with many saying that having a dedicated office—or at least more space to help find a quiet spot to work—at the top of their wishlist. Listings mentioning a home office have jumped about 10% since April 2019, according to Zillow.

Instant Insights /

Boston Fed President Says Downtown Multifamily Could Be at Risk as Suburbs Beckon

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