Real estate expert says we may not see COVID-19's impact on Arizona's commercial real estate for some time
PHOENIX - The structure of many businesses has changed dramatically since the still-ongoing COVID-19 pandemic hit in March 2020, and that is especially true for those working in offices.
Due to the pandemic, many people have stopped going into offices, and retail businesses were closed during lockdowns, some even shutting down permanently. As a result of those changes, commercial real estate prices are falling in parts of the country.
In Arizona, however, the state's commercial real estate market has yet to see much of a dip, for now.
On Jan. 4, FOX 10 spoke with commercial real estate agent Aaron Dutcher, who said people may not see the effects of the pandemic on commercial real estate for some time.
Dutcher says commercial real estate deals have come to a screeching halt, but leases are staying steady.
"We’ve had a lot of fits and starts," said Dutcher. "We’ve had a lot of investors say 'I’m ready to go, let’s do this,' and then we’d get the property and get them under contract, and then the cold feet would set in. 'Well, let’s wait until after the election. The vaccine said it was going to come and now it’s not. You know what, let’s just cancel the deal, let’s wait.'"
Dutcher says office and retail spaces are being hit the hardest.
"The bigger restaurants with the bigger footprints and larger overhead, 5,000 square foot restaurants, they’re just getting really hammered and we’re seeing those closures pretty regularly," said Dutcher.
On the other hand, industrial spaces aren’t seeing any negative effects, and are even in high demand.
As far as office space, Dutcher says people won't know the lasting effects for quite some time, but he does know property owners will have to pivot how they market their space.
"Office space that didn’t have a personal fitness center or a cafe are now getting personal fitness centers and cafes," said Dutcher.
Some of the harder-hit areas are places like New York and California, which is a plus for Arizona. Dutcher says many companies are looking to relocate to Arizona, especially those coming from California. He says this is because many places in California are still shut down.
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