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The coronavirus pandemic “will likely result in an unprecedented period of economic instability and recession that could last as long as three years,” according to Ethan Penner, co-founder and managing partner of Mosaic Real Estate Investors.
Penner started originating commercial mortgages for securitization following the savings and loan bailout in the late 1980s, so he’s been through at least three economic cycles.
An economic slowdown long had been expected as the post-2008 recovery was “long in the tooth,” but solid job numbers and low interest rates were expected to contribute to what’s commonly referred to as a soft landing, where economic growth slows, but avoids recessionary conditions. That changed in March when nearly the entire nation took a lockdown approach to addressing what was feared would be massive infection rates and deaths from the pandemic.
While states are now finally re-opening their economies, they’re doing so at a slow, pragmatic pace. And people remain cautious, indicating it’ll take time before they resume their normal.