Face-to-face Interactions, Tenant Resilience, and Commercial Real Estate Performance

The COVID-19 pandemic has induced an exogenous shock to the face-to-face (FTF) economy and the use of commercial real estate (CRE). By linking tenants, properties, and CRE firms, we construct three novel FTF measures that capture tenant remote working, internal communication between coworkers, and external contact with customers. We find that firms holding properties with tenants that are more resilient to social distancing perform better. These FTF effects weaken over the long term. As investors are capable of compiling valuable information regarding how tenants operate at granular levels, our findings support market efficiency and shed light on post-pandemic CRE performance.