NAIOP: These real estate trends are speeding up in wake of COVID-19 in Arizona, nationwide
The disruption in normal business caused by the novel coronavirus is accelerating certain real estate trends nationwide and in Arizona.
The nation’s shift to online purchasing and working from home has kept the need for industrial buildings and data centers high. Arizona has become an attractive place to develop both industrial and data centers due to the state’s proximity to California and Mexico and lack of natural disasters.
“Industrial real estate is at the epicenter of automation and e-commerce distribution and stands to benefit from this transformation we are going through,” Timothy Savage of New York University, and a research economist for NAIOP, said in a statement.
Suzanne Kinney, president and CEO of the Arizona chapter of NAIOP, said some asset classes, especially industrial, are outperforming others through the closures due to coronavirus.
“Our friends in industrial in many ways are on the front lines,” Kinney said.
Restaurants, retail and hospitality continue to be the hardest hit by the closures, nationwide and in Arizona. NAIOP’s national forecast predicts hospitality will bounce back quickly after the pandemic, but there will be a continued decrease in brick and mortar stores, especially independent businesses.
Jobs that are generally done in Class A and B office space have mostly moved to remote work, but have not had their business affected nearly as harshly as retail and restaurants.
However, many experts doubt companies will want to give up office space altogether once the pandemic is over.
“I hear people expressing concern about the limitations of telecommuting,” Kinney said. “It’s not the same as working in an office environment where people can easily work together. It’s more likely that companies may have more flexibility regarding telecommuting, but I don’t see most forgoing office space.”
Jonathan Keyser, founder of tenant representation brokerage Keyser, said he thinks companies might be more interested than ever in office space once the pandemic is over.
“I think people are looking forward to getting back to the office,” he said.
Source: Phoenix Business Journal