3 real estate investing experts share their thoughts on coronavirus-induced urban flight and what it means for property investors
As the pandemic lingers, buyers and renters are rethinking their obsession with the bustling streets and bright lights associated with city life. An elevator ride, once seen as an opportunity to briefly chat with a neighbor, is now a potential danger. The proximity to entertainment and restaurants no longer matters as business owners make the hard decision to close down or limit access.
In response, buyers and renters are turning their sights to suburban areas with less density and more greenspace — two prized features for those who have spent the pandemic in cramped spaces. So, what does this mean for real estate investors who spent the last decade building their empires in the city?
Is it time to ditch the high rises for open spaces?
Don’t call it ‘urban flight’
“There’s a lot of talks right now about urban flight, and there’s a lot of talk about the suburbs,” Atlas Real Estate Group CEO Tony Julianelle told Inman. “A number of our larger institutional investors would like to have more exposure in the suburbs than they have now; however, I think it’s way too early to call that a fundamental shift.”
“There’s a quote from Warren Buffet a few years ago where he said, ‘When everybody is greedy you should be afraid, and when everybody is afraid, you should be a little greedy,’” Julianelle added. “I’m probably not stating that perfectly, but the concept [stands].”
He continued, “It feels like some of this shift to the suburbs or the exurbs further out is driven by fear right now, and to say that people’s desire to be in an urban area isn’t going to rebound substantially once we’re past coronavirus is premature.”