Lansing real estate market creeps toward recovery in Q2
Like in other areas, the COVID-19 pandemic upended multiple sectors of the Lansing commercial real estate market. In Q2, the Lansing market made a slow creep toward recovery until business were renounced to Phase 2 once again at the end of June. Deals that were already in progress when the COVID-19 pandemic hit the market continued for the most part, though transaction times were delayed because approvals from municipalities and banks were difficult to obtain. Despite the continuation of some deals, others were postponed or ultimately eliminated. A $35 million hotel and land sale were cancelled because of the negative outlook for new retail and hospitality developments. Another plan for the building of a new car dealership was postponed and a big box store that had been under contract for nearly a year was canceled.
In Q2, there were signs that Lansing was headed toward re-opening. Lansing Symphony Orchestra announced its first concert will take place in October with social distancing guidelines. Regal Lansing Mall movie theater is planning to reopen July 10 with new safety and health measures based on federal and state guidelines. However, since the area was ordered back to Phase 2 re-opening guidelines, the future is unknown for so many sectors of commercial real estate, most notably for office and retail. As far as recovery of demand for space, rental activity will affect vacancy and rental rates. Cap rates for investment will be impacted negatively as well. Just how much impact will be felt throughout the Lansing area remains to be seen.