The Institutional Risk Analyst

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Jonathan Miller on the U.S. Real Estate Market

New York | Jonathan Miller is President and CEO of Miller Samuel Inc., a real estate appraisal and consulting firm he co-founded in 1986. In addition to a command of the particular when it comes to asset valuation, He covers 35 different markets around the U.S. for Douglas Elliman, making Jonathan a keen judge of the real estate market environment and the economy. The Institutional Risk Analyst spoke to Jonathan from his lockdown operations center in Connecticut.

The IRA: Thank you for taking time Jonathan. The onset of COVID19 and related hysteria is a shock to many people around the world. We are hearing reports of falling rent rolls and defaults by large anchor tenants here in Gotham. What is it like in the world of New York real estate for landlords?

Miller: The overview is that landlords are between a rock and a hard place. There has been a tremendous drop in new leasing activity. We are seeing new leasing activity down year over year some 70 plus percent. Brokers cannot show space due to the lockdown, so this has an impact despite virtual tools. This is not lease renewals, which we cannot see. A typical building might have one third new leases and two thirds renewals. If we are seeing a drop in new leases, then we are probably having a spike in renewals. But that is information that is never shared with the public.