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

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In his interview Rosengren spoke of the major shift the industryis expected to see as a result of the pandemic, honing in on thechanges that will result from an expected permanent shift to remote work for manycompanies.

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

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

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

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The suburbs are clearly on their way to becoming a favored assetclass for offices for similar reasons. Companies that don't want tocram employees into headquarter offices are considering smaller,satellite offices in the suburbs closer to where their employeeslive. Microsoft, to name one example, recently signed a400,000-square foot lease in Reston, Va., with Boston Properties inan expansion of its smaller nearby space.

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

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Meanwhile, there is supporting data for Rosengren's predictionabout workers' preference for home offices. Most Americans workingfrom home say they'd consider a move if allowed to work remotelylong-term, according to a new Zillow survey, with many saying thathaving a dedicated office—or at least more space to help find aquiet spot to work—at the top of their wishlist. Listingsmentioning a home office have jumped about 10% since April 2019,according to Zillow.

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