What happened

Posting a 68% gain in November, according to data from S&P Global Market Intelligence, shares of real estate investment trust (REIT) Empire State Realty Trust (NYSE:ESRT) rose almost as dramatically as its namesake asset, the Empire State Building. However, investors shouldn't get too excited; there are still major headwinds to deal with.

So what

The big news in November for the office- and retail-focused REIT was the positive vaccine development news out of Pfizer and BioNTech, AstraZeneca, and Moderna. Investors, looking at the potential that the world would soon get a handle on the coronavirus pandemic, started to bid up the shares of companies that had been hit hard by the impact of COVID-19. New York City-focused Empire State definitely falls into that category, as office workers have increasingly shifted to remote work and big-city residents have been moving to the suburbs. 

People walking in the atrium of an office building.

Image source: Getty Images.

A vaccine will undoubtedly help to reverse these trends, but the timing and extent of the reversal are hard to define and investors have quickly priced in a lot of good news. For example, although there is encouraging vaccine news, the world is seeing a material uptick in COVID-19 cases right now. That will have to play itself out before a vaccine can have any positive impact. Moreover, it will take months if not quarters before a vaccine is distributed widely enough to materially alter the course of the coronavirus. And until that happens, it is highly likely that offices will remain lightly populated and people will avoid big-city life. Even after the world moves past the coronavirus, it will likely take time for such trends to meaningfully reverse. 

Now what

Empire State Realty's November advance was impressive, but the swift move shouldn't be taken as an all-clear. There are still very material issues that this highly focused REIT is dealing with and they aren't likely to quickly abate. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.