ARIZONA NEWS

Commercial real estate grows in Arizona despite hits from COVID-19 pandemic

Sep 30, 2021, 4:35 AM

(Facebook photo/City of Phoenix, AZ USA)...

(Facebook photo/City of Phoenix, AZ USA)

(Facebook photo/City of Phoenix, AZ USA)

PHOENIX- The COVID-19 pandemic sent a majority of the workforce home and out of the office, but that doesn’t mean commercial real estate in Arizona took a hit.

“The perceptions of a negative market are pretty over-exaggerated at this point,” Jon Rosenberg, co-founder of LevRose Commercial Real Estate, told KTAR News 92.3 FM.

He adds that despite more people working from home, the commercial market is currently seeing pre-pandemic levels of activity.

“The office market, the first half started out slow, picked up substantially,” Rosenberg said.  “There’s been over 2 million square feet of new leases signed in just the second quarter of 2021.”

That’s up 65% from the same quarter in 2020, which Rosenberg attributes to California firms coming to the state.

“We’re seeing a lot of the California firms come here,” he said. “The rents are much lower, much more affordable.

“The average metro Phoenix rent is roughly 30% lower than the national index.”

San Francisco rents are 2 ½ times higher than Phoenix, according to Rosenberg, and Los Angeles is about 50% higher.

More people and businesses moving to the state also results in the need for additional coffee shops, restaurants and grocery stores as retail real estate is in demand as well.

“Retail overall is much stronger than the perception,” Rosenberg said.

More retail businesses have moved into new spaces than out in the first half of 2021, according to Rosenberg.

“There’s the old saying that retail follows rooftops, so as we continue to see growth in new construction we’re seeing more retail that follows those new developments,” he said.

Rosenberg added a lot of this is smaller California and Texas concepts coming to Arizona, as leases under 5,000 square feet make up 90% of the new activity coming into metro Phoenix.

He attributes this boom to the COVID-19 pandemic allowing workers to move where they want to live, not where they have to live since they’re working from home.

A lot of those workers are now being picked up and hired by the firms relocating in Arizona, Rosenberg said.

We want to hear from you.

Have a story idea or tip? Pass it along to the KTAR News team here.

Arizona News

The number of people driving more than 90 minutes to get to work has dropped in the Valley. (Jim Po...

Brandon Gray

Update: Backup cleared on I-17 in Northern Arizona.

Memorial Day travel is causing heavy traffic on southbound Interstate 17 in northern Arizona.

24 hours ago

(Pexels Photo)...

KTAR.com

1-year-old dead after drowning in pool in Mesa

  A 1-year-old boy died after being pulled from a Mesa pool over the weekend, officials said.

24 hours ago

(Twitter Photo/@AZGFD)...

Alex Weiner

Endangered Mexican wolf pups fostered in Arizona packs this month, wildlife officials say

Three Mexican wolf pups were fostered into a pack in Arizona in efforts to increase genetic diversity in the endangered wild populations. 

24 hours ago

(Facebook Photo/Dunkin')...

Brandon Gray

Here’s how you can get free coffee for a year at Mesa’s new Dunkin’ location

A new Dunkin' location is set to open in Mesa and some lucky customers will have the chance to get free coffee for a year. 

24 hours ago

In addition to the towers in the first phase, South Pier will have more housing units and retail th...

Ron Davis/Phoenix Business Journal

Developer secures large loan for multibillion-dollar Tempe Town Lake project

The developer of South Pier along Tempe Town Lake has secured a hefty loan to finance the completion of the first phase of the mixed-use project.

24 hours ago

(Facebook Photo)...

Associated Press

Mother pleads guilty after Arizona boy starves to death

An Arizona mother has pleaded guilty to murder and child abuse charges stemming from the death of her 6-year-old son who had been locked in a closet and denied food.

2 days ago

Sponsored Articles

...

OCD & Anxiety Treatment Center

5 mental health myths you didn’t know were made up

Helping individuals understand mental health diagnoses like obsessive compulsive spectrum disorder or generalized anxiety disorder isn’t always an easy undertaking. After all, our society tends to spread misconceptions about mental health like wildfire. This is why being mindful about how we talk about mental health is so important. We can either perpetuate misinformation about already […]

(Desert Institute for Spine Care in Arizona Photo)...

Desert Institute for Spine Care in Arizona

5 common causes for chronic neck pain

Neck pain can debilitate one’s daily routine, yet 80% of people experience it in their lives and 20%-50% deal with it annually.

...

Day & Night Air Conditioning, Heating and Plumbing

Company looking for oldest air conditioner and wants to reward homeowner with new one

Does your air conditioner make weird noises or a burning smell when it starts? If so, you may be due for an AC unit replacement.

Commercial real estate grows in Arizona despite hits from COVID-19 pandemic