Since the outbreak of the virus in mid-March, office REITs have significantly underperformed the market. The key drivers behind the lagging performance are the current hardships in rent collections and the increased uncertainty about the future demand.
Undoubtedly, the greatest threat for office REITs is not the notion of offices becoming completely empty, but the decreased trajectory of future demand that will inevitably cause oversupply, putting a downward pressure on rents.
A place where there is a lot of "blood in the streets" is NYC, which has suffered a lot from the COVID-19 and the