What Lower Vaccine Efficacy Rates Mean for Real Estate Investors

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Hopes were high for 2021 after the Moderna and Pfizer-(NYSE: PFE) BioNTech (NASDAQ: BNTX) vaccines, which are estimated to have a 94% to 95% efficacy rate, were approved for emergency use authorization (EUA) in late 2020. The vaccines, if taken and distributed on a global scale, could curb if not eliminate the further spread of COVID-19, which in turn would provide much-needed economic relief and help the world return to some sense of normalcy.

Vaccines may not be able to save the day as hoped

But as new coronavirus strains have been discovered in Brazil, the U.K., and South Africa, it appears the efficacy rates of the vaccines are decreasing with time, particularly against the new 501Y.V2 variant, which is as much as 50% more contagious than previous ones.

Scientists and biologists are racing to determine the ultimate impact of the new 501Y.V2 strain and if the current vaccinations in development or distribution will protect against it. However, early findings by website bioRxiv found the antibodies in 501Y.V2 can evade current coronavirus treatments, putting the efficacy of available vaccines into question.

These findings have yet to be peer-reviewed, and further clinical trials and time will tell the extent of reduced effectiveness, if any. But Johnson & Johnson‘s (NYSE: JNJ) vaccine in development is estimated to be 85% effective among its trial patients as a whole. United States patients saw an 72% efficacy rate, but only 57% was seen in South Africa, where the new coronavirus strain is abundant.

Adaptations of viruses are normal. It’s a survival mechanism to help the virus continue spreading (and living). It’s likely more mutant strains will continue to pop up on the horizon over the next year, especially as more of the population builds immunity to existing strains.

Bad news for real estate investors

Right now, commercial investors and hundreds of thousands of landlords, tenants, and homeowners are suffering from a loss of income. Businesses are closing their doors left and right as they struggle to stay afloat.

Reduced efficacy in vaccines, coupled with hesitation from the general population and medical professionals to take the vaccine, means stagnant business and reduced economic activity is likely to continue for the next year, if not longer. The vaccine was the saving grace for recovery. If its effectiveness is in question, it’s unlikely, even with mass distribution, the virus will stop anytime soon.

The Millionacres bottom line

Landlords and struggling business owners need to prepare for alternative solutions and find a way to adapt to the current climate. Utilizing virtual resources to reduce potential spread of the virus and potentially adapting the property’s current use, as malls are doing, may be the best way to salvage your current investment.