Then came the issues surrounding Covid-19 and the lockdowns.

The trajectories suddenly turned into the same direction: down for all, but to different degrees, some sectors barely ticking down and other sectors dropping more sharply. And retail properties plunged.

Here is a first taste of the dynamics in Europe, where the lockdowns started earlier than in the US – in Italy, local lockdowns started on February 21, nearly a month before the first local lockdown in the US, the San Francisco Bay Area.

Retail properties have long been suffering from the structural shift of where retail spending takes place, the shift from brick-and-mortar stores to ecommerce. This shift had been relentlessly progressing over the years. But in March and April, it exploded higher as brick-and-mortar stores were shut down and ecommerce operations boomed.

Tenants of retail properties are now having trouble paying rent, or are unwilling to pay rent, as their stores are closed. Some of them will go out of business altogether; others will attempt to stay in business but renegotiate their leases. This whole dynamic has accelerated, as many future years of more or less gradual change are now being distilled into a few months. It has thrown the retail property sector into turmoil.