Commercial real estate is always a high-risk, high-reward business, but this year’s events have made the near future more unpredictable than ever. Analysts have looked at the data and come up with wildly different projections for how the market may look over the next year.
There are some good signs for commercial real estate in Arizona. Some real estate professionals have noticed an increasing number of California based corporations expanding to Arizona, or moving their headquarters to Arizona. This follows a long-term trend, as real estate costs continue to rise on the West Coast. Meanwhile the outlook is good for grocery stores, pharmacies, medical companies, food processing and distribution companies and other so-called essential businesses. At a time of great uncertainty, these businesses have been stable, or perhaps busier than ever, meaning they make very desirable tenants.
Now, the bad news
However, there are many signs of trouble ahead for other sectors of the commercial real estate market. Shopping malls have been hurting in recent years due to the growth of online shopping and other long term trends. Retail stores, restaurants and the hospitality industry in general have been subjected to serious restrictions this year, and state and federal protections have only been able to do so much to help them pay their rent. Meanwhile, many Arizona workers are working from home, meaning that demand for office space is down. Some employers have begun subleasing their office space, with the idea that many of their employees may work from home for the indefinite future.
With all this uncertainty in the air, it’s more important than ever that individuals and businesses in commercial real estate seek out skilled legal help. An attorney with experience in Arizona commercial real estate can help landlords, tenants, developers and others to protect themselves and their investors through careful planning and well-drafted contracts.