The omicron variant is expected to "hinder, but not derail" the recoveries for commercial real estate and the overall economy, according to a new analysis from Moody's Analytics.

"The evidence from the country's experience with the Delta variant this past summer and fall illustrated the desire and need for in-person activity, which translated into better-than-expected CRE performance," Moody's Thomas LaSalvia and Kevin Fagan write. "While Omicron is a little different, we think most of the evolutionary decisions have already been made. But there is one caveat⁠—does the presence of yet another variant further entrench remote work and push the office recovery out a bit further? This is a situation we are monitoring closely."

For the hotel sector, upper-tier properties suffered most over the last two years.  But while the omicron variant "has likely already hurt revenues" for that subsector…this will likely not affect longer-term planning and performance," according to LaSalvia and Fagan.  And if evidence from the Delta variant is any indication, the effect of omicron on domestic travel is also likely to be minor, the pair write, noting that TSA throughput numbers are about 80% over 2019 levels. 

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