As we have noted, the most important impact of Russia’s invasion of Ukraine is the devastating loss of life, and the physical and emotional destabilizing of life for the Ukrainian people. We hope for peace soon. 

Taking a deeper look at the war’s impact on corporate real estate, we point to its effect on the supply chain, and to the growing list of companies that are severing ties with Russia. 

First the supply chain: 

• “The fighting in Ukraine has shut down small but important industry suppliers, shutting plants far away from the conflict zone, while sanctions and severed trade routes are hindering car and parts shipments to and from Russia, once seen as a growth market,” according to The Wall Street Journal  “European auto makers such as Renault SA, which owns AvtoVAZ, the Russian company that makes the Lada brand, Volkswagen AG and its brands Audi, Skoda, and sports-car maker Porsche, are among the hardest hit by the sudden cessation of business in Russia and the lack of vital parts from suppliers inUkraine.
• Russia’s invasion of Ukraine threatens to pile further pressure on chip manufacturing as a squeeze on the supply of rare gases critical to the production process adds to pandemic-related disruptions. Ukraine supplies about 50 percent of the world’s neon gas, analysts have said, a byproduct of Russia’s steel industry that is purified in the former Soviet republic and is indispensable in chip production. Manufacturers have already been reeling from shortages of components, late deliveries and rising material costs, with companies that rely on chips, such as carmakers, facing production delays as a result. Reported in Financial Times
• And according to CNN, Russia is a major producer of commodities, everything from oil and natural gas to palladium and wheat. Ukraine is also a major exporter of wheat as well as neon. The crisis is casting doubt on the availability of a sizable chunk of those vital supplies.”The greatest risk facing global supply chains has shifted from the pandemic to the Russia-Ukraine military conflict and the geopolitical and economic uncertainties it has created,” Moody’s Analytics economist Tim Uy wrote in a report Thursday.

Also according to CNN, more companies in more industries are limiting operations in Russia or severing ties completely, including social media and tech firms Facebook, Twitter, Netflix and Spotify; automakers GM, Ford and Volkswagen; energy companies BP, Exxon, Shell and Equinor; and financial firms Visa and Mastercard. 

See more here.