Compared to April, commercial real estate developers in May sawlesser impacts from the COVID-19 pandemic, although theimprovements are slight and developers have come to believe theirbusiness interruptions will last longer than first thought.

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Those findings were part of a survey from May 18 to 20 completedby 461 developers for the Commercial Real Estate DevelopmentAssociation, which uses the acronym NAIOP, which stands for thegroup's former name, National Association for Industrialand Office Parks.

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Even though 62% of respondents still say they're seeingpermitting or entitlement delays and 57% are still experiencinglower leasing activities, both of these metrics represent animprovement from the NAIOP survey conducted in April. There's beena sharp decline developers saying they see delays or shortages inconstruction supplies: 31% said this in April, and only 19%experienced it in May.

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"This may reflect a resumption in shipments of supplies fromChina," said the survey report by Shawn Moura.

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There was only one metric that got worse from April to May: Thenumber of respondents who see delays in financing. Otherwise,coronavirus impacts on projects got slightly better for everymetric that the survey measured–thing such as declines in leasing,delays from social distancing, government mandated halts onconstruction, and more.

Good news for industrial, multifamily

Another optimistic finding in the survey was that respondentswere seeing increases in acquisition and development activity inindustrial and multifamily properties. Respondents reported a 7%increase from April to May in industrial building newdevelopments and a 5% increase in acquisitions of existingindustrial buildings. As for multifamily properties, developmentincreased by 4.7% and existing acquisitions increased by 10%.

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Moura wrote in the report that these improvements "suggests thatlending has begun to stabilize and that participants are morewilling and able to price deals."

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However, the rates of respondents reporting no deal activity washigh. It was just over 40% for industrial buildings and nearly 60%for multifamily.

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The worst was office buildings–70% of respondents said they sawno deal activity, which was a higher rate than April. In fact, theoffice sector didn't fare well in the survey. The rate ofrespondents who saw new development on office buildings stayed flatfrom April to May. The developers in the survey saw feweracquisitions of existing office buildings in May, compared toApril.

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Retail was even worse.

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"Retail deals remained rare, with 85.6% of respondents reportingthey had witnessed no deal activity in the last three weeks," thereport said.

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Another sobering finding is that the developers now expect thebusiness disruptions to last for longer than one year. There arestill 55% who think the impacts will fade in less than a year,however, the rate of developers in the survey who think thepandemic disruptions will go on for more than a year grewfrom 36% in April, to 46% in May.

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"This shift may signal that respondents expect the economicrecovery to be more gradual than they did in April, or that theyexpect the coronavirus will remain a significant public healthconcern for longer," said the report.

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Angela Morris

Angela Morris is ALM Media's Texas litigation reporter. She covers lawsuits in all levels of Texas state and federal courts. Based in Austin, Morris earned journalism and government degrees from the University of Texas at Austin in 2006, and since then, has worked primarily as a reporter and writer, but also has skills in videography, photography and podcasts. Follow her on Twitter at @AMorrisReports.