New York office and apartment landlords received a rare shot of good news Monday with Pfizer’s announcement that it’s getting closer to developing an effective Covid-19 vaccine.
An early analysis found that Pfizer’s vaccine was more than 90 percent effective in treating Covid-19 on clinical volunteers. The company said it could potentially manufacture enough vaccines for as many as 20 million people by the end of 2020.
The news led to spikes in both the Dow Jones Industrial Average and the S&P 500, which rose by nearly 3 percent and 1 percent, respectively, by day’s end. Real estate stocks in particular saw big gains.
Empire State Realty Trust, a REIT focusing on office and retail properties in Manhattan (including the Empire State Building), saw its stock rise more than 37 percent. The share price for SL Green, one of New York’s largest commercial landlords, jumped nearly 37 percent. And Vornado Realty Trust’s stock rose over 27 percent.
Apartment REITS also benefited from the news. The price for UDR, which owns apartments in New York and other large U.S. cities, rose nearly 14 percent. Sam Zell’s Equity Residential, which has rental properties in New York, San Francisco and Boston, saw its shares rise by nearly 16 percent.
Real estate stocks were already on the upswing in the aftermath of the presidential election, with top earnings including large service companies and asset-management firms, proptech firms and residential home builders. Gains last week were lower for the office and retail sectors, making today’s news all the more noteworthy.
New York’s commercial real estate market has been hit hard by the pandemic and recovery has been slow, with only 10 percent of Manhattan office workers returning to offices as of late October.
Apartment REITs, meanwhile, have their own issues: Big firms that are invested in multifamily properties and residential complexes in gateway cities could face trouble going into next year, according to a recent analysis from Fitch Ratings. Covid continues to exert pressure there, as tenants in cities like New York and San Francisco migrate to the suburbs, and low-income renters deal with unemployment.