Global insurers want to increase investments in commercial warehouses as their stakes in office space become riskier because of employees working remotely during the novel coronavirus pandemic, Goldman Sachs Asset Management (GSAM) executives said.

The pandemic is hastening a shift among insurers to exchange “undesirable” real estate investments, which also include retail properties, such as store fronts, for investments in warehouses, said executives from GSAM’s arm that manages investments for insurers’ portfolios.

The executives spoke during a briefing about results on Thursday for an annual GSAM survey about insurers’ investments.

Pandemic lockdowns have spurred companies to re-examine their need for office space if employees continue working at home in the post-pandemic world, a trend that could drive down office occupancy rates and rents.

Worries about COVID-19, the disease caused by the novel coronavirus, have also increased demand for warehouse space as business moves to e-commerce sites and consumers avoid making trips to brick-and-mortar stores.

Commercial real estate trends during recent years are accelerating because of the pandemic, but it is difficult for insurers to unload troublesome real estate assets, such as mortgages, during the pandemic in order to make the switch, said Mike Siegel, global head of GSAM Insurance Asset Management.

Insurers are monitoring the impact on their real estate investments and trying to “manage through,” Siegel said.

“They are not going to sell unless they feel they can get good value,” he said.

Insurers would have to sell those investments into funds that buy “distressed” investments, but they are in a position to avoid such a move, he added.

Distressed funds acquire risky holdings on the cheap, hoping to turn a profit. (Additional reporting by Alwyn Scott.)