Pharmaceutical giant Pfizer’s Monday announcement that its COVID-19 vaccine has shown promising results in its stage three clinical trials, bringing us closer to an actual working vaccine, has led to a surge in real estate industry stocks.
Many sectors the real estate industry had faltered during the coronavirus outbreak, but the Wall Street Journal now has some good news for investors:
“The share prices of some of the country’s biggest property owners were up more than 20% Monday compared with a roughly 3% increase in the Dow Jones Industrial Average,” it reported.
The COVID-19 pandemic has led to higher office vacancy rates, while hotel and retail owners have also been hard-hit due to shutdowns and travel bans. But after Pfizer’s and BioNTech’s positive vaccine news broke Monday, hotel and retailer stocks jumped significantly.
Some of the biggest winners Monday include Host Hotels & Resorts Inc., one of the largest hotel owners in the U.S., which jumped 30%. Simon Property Group, which owns malls across the U.S., went up 28%, and SL Green Realty Corp., the largest office owner in Manhattan, saw a 37% stock increase, the Journal said.
“Real estate was a COVID loser,” Michael Knott, head of U.S. REIT research at Green Street, told the Journal. “Many of the business models are based on assembly of people. And now with the potential vaccine, it’s like Doc Brown [from 'Back to the Future'] figured out how to get his time machine to work.”
Pfizer said on Monday that its early test data shows its vaccine, which is still being trialed, could be 90% effective at preventing COVID-19.
“This offers a ray of hope that the market did not hesitate to take advantage of,” Tai Hui of J.P. Morgan Asset Management said in a report.