A surge in new COVID-19 casesacross the South and Southwest signal the possibility of renewedbusiness closures,  Marcus & Millichap predicts in anew research brief. 

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Those closures, despite June business reopenings that supportedrecord hiring or rehiring, cloud July's job outlook, especially inTexas, Florida, and Arizona, the national real estate sales andfinancing firm's monthly briefing predicts.

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The dramatic rise in COVID cases —  especially inTexas, Florida and Arizona — is forcing businesses with a largepublic component either to pause reopenings or close again,especially bars and gyms, according to the Los Angeles-basedfirm.

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The result: employees who returned to work in June may findthemselves furloughed a second time, the firm's July researchpredicts.

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Renewed furloughs this month face an additionalcomplication.  Federal unemployment benefits are set toexpire before August unless the U.S. Congress provides additionalstimulus. The impact on the real estate industry, especiallyapartment complexes,  could be significant as more peopleface impaired financial security and are forced to prioritize whatbills they are able to pay, the July brief warns.

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Meanwhile, although record numbers of people returned to work inJune, not everyone is working full time, according to thebrief.  The number of people who want to work more hoursbut can't due to unfavorable business conditions or other economicreasons remained above 9 million in June — about double February'stotal before the coronavirus took hold across the nation, accordingto the brief.

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And although 4.8 million people returned to work in June, theunemployment rate remains at 11.1 % with 14.7 million fewer jobsavailable than in February, the brief said.

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Private messenger and courier services has remained steady,despite the onslaught of the virus, according to the brief. Despitehealth concerns, commerce, including commercial real estatetransactions, continue to take place, and couriers ferryingdocuments back and forth facilitated $10 billion worth ofcommercial real estate trade in May, according to the brief.

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Marcus & Millichap's July outlook was more sobering thanJune numbers initially indicated when restaurants, hotels andwarehouses began rapidly rehiring as states lifted lockdownrestrictions that were put in place in March.  Nearly 1.5million people returned to jobs in restaurants, bars andnightclubs.  Accommodation employment associated withrecovering hotel and motel occupancy rose by 22 % in June as hoteloccupancy rates began recovering after bottoming out in earlyApril, according to the July brief.  Tourism jobs,especially scenic and site-seeing transportation rose 19.8 % inJune.

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Meanwhile, hiring in the trade and transportation sectorassociated with merchandise storage and warehousing remainedstrong.  The need to maintain inventories amid supplydisruptions coupled with a pandemic-driven boost in e-commercespending placed renewed emphasis on the importance of warehouse anddistribution space, the research brief said.

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R. Robin McDonald

Daily Report reporter R. Robin McDonald's journalism career includes stints as a staff writer at The Atlanta Journal-Constitution, The Fort Worth Star-Telegram, The Wichita Eagle, and The Anniston Star and as a trial tracker at CourtTV and CNN. She is the author of two true crime books -- Black Widow: The True Story of the Hilley Poisonings and Secrets Never Lie: The Death of Sara Tokars.