The Azucena Take: The Third Stimulus and the Commercial Real Estate Market

Good news, the third stimulus package passed the House and Senate. It’s expected to be signed by the President sometime this week, thus ensuring the economy will remain stable until we have overcome the pandemic.

So what does this mean for commercial real estate investors? Marcus & Millichap looked into how the third stimulus will impact both the economy and the commercial real estate market. We say this with great confidence that we could see an uplifting 2021.

We have broken down all the key details of the third stimulus and how it will affect the commercial real estate market.

Pay Check Protection Program: The third stimulus includes a new round of funding for PPP loans that have helped small business. This program has provided forgivable loans to small businesses to ensure they retain their employees. Small businesses are responsible for employing half of the work force while also being part of the economic sectors hit the hardest by the pandemic.

Funding for Vulnerable Sectors: Additional funds have been provided for sectors hit the hardest by the pandemic. This includes sectors like education, travel, health care, child care, and restaurants. These sectors are important to the economy and will require additional financial support.

Enhance Unemployment: Those who have lost their job will be receiving additional support. The new stimulus will extend unemployment benefits to August 2021 while providing an additional $400 a week. There is also additional support to provide aid for housing. This will give a boost for retail and apartment properties.

Stimulus Checks: A new round of stimulus checks will be provided, thus creating economic growth. Every time a stimulus check has been given, it has undone the economic damage created by the pandemic. Retail sales have seen months of growth following the distribution of stimulus checks. This $1,400 check is expected to give another massive boost to consumer spending and investor confidence.

Overall, the third stimulus will provide a major boost in confidence for commercial real estate investors. Extra funds and an economic lifeline will help boost retail sales. PPP loans will allow businesses to survive and people employed. Additional funding will also help with rent (be it an office space or apartment unit).

Economists expect that most jobs will return once the majority of the population has been vaccinated. For now, the support provided by the stimulus package should help the economy while also setting the foundation for a recovery.