Monday’s announcement of promising COVID-19 vaccine test results prompted investors to get bullish on several real estate stocks, notably within sectors of the market that have faltered during the pandemic. The Wall Street Journal reported as part of Monday’s vaccine news: “The share prices of some of the country’s biggest property owners were up more than 20% Monday compared with a roughly 3% increase in the Dow Jones Industrial Average.”
Office owners have faced high vacancy rates during the pandemic. Hotel and retail owners also have been among the hardest-hit real estate sectors during the pandemic as consumers avoid public venues. But after news broke of the positive vaccine results from BioNTech SE and Pfizer Inc., hotels and retailers saw an increase in the stock market.
Among the winners on Monday: Shares of Host Hotels & Resorts Inc., one of the nation’s largest hotel owners, jumped 30%. Simon Property Group, one of the country’s largest mall owners, saw shares increase 28%. SL Green Realty Corp., Manhattan’s largest office owner, posted a 37% increase, WSJ reports.
“Real estate was a COVID loser,” Michael Knott, head of U.S. REIT research at Green Street, told WSJ. “Many of the business models are based on assembly of people. And now with the potential vaccine, it’s like Doc Brown [from 'Back to the Future'] figured out how to get his time machine to work.”
Pfizer reported on Monday that its early data suggested its vaccine under development might be 90% effective in preventing COVID-19.
“This offers a ray of hope that the market did not hesitate to take advantage of,” Tai Hui of J.P. Morgan Asset Management said in a report.
Source: “Real-Estate Stocks Soar on Hope Vaccine Will Ease Covid Concerns,” The Wall Street Journal (Nov. 9, 2020) [Log-in required.]
