How the pandemic continues to affect the real estate market. Companies that own office buildings and hotels, or those that lease space to bars, restaurants, and other retailers have been the hardest hit area of commercial real estate as the pandemic forced many businesses to shut down temporarily or operate on a limited basis.
Trends for commercial real estate could take longer to recover as businesses reassess their needs post-pandemic. We talked with Danny Court, Principal and Senior Economist from Elliot D. Pollack & Company about it.
He explains why and what is the most impacted. He said more people are leaving spaces than signing onto new places. They are seeing lots of vacancies. He said they are even nearing 20 percent.
Work from home is here to stay so they think that it will be a hybrid between in person at home. He said they will probably see more space for employees. He said right before the pandemic, they were seeing very very crowded office spaces.
There are certain areas that may not be at the top of people’s lists nowadays, for example, gyms and fitness areas. He told us that it is too soon to tell with a lot of this.
We looked at the retail area. He said they have been struggling for a while now because people are buying things at home.
He said retailers are being pushed to industrial markets and warehouses instead of physical spaces. Court also, said that the retailers are not investing in new locations like in the past. Arizona has a “pretty strong retail market here.” he said.
We talked about solutions and what is a good balance for these areas. He said it is important to introduce the residential areas to help the commercial areas.
We also talk about is this area has changed for good. He believes it has and that a lot of the formats are here to stay.