Among the numerous mind shifts in the post-COVID world, our changed perceptions of the office world are likely to be among the most lasting. Many organizations that previously dismissed the concept of working from home were forced into recognizing the utility of it—and many have been pleasantly surprised by the actual levels of productivity their workforces have achieved. Businesses in Arizona, across the U.S., and throughout the world are reconsidering aspects such as the size of their office footprint or strategies such as staggered work hours, so that all workers do not need to be present at the same time.
There is plenty of desirable office space in the Valley, and the wave of cohabitation and subleasing may point to what the future looks like in absorbing it. Through the first four months of 2020, in fact, the Phoenix area saw a nearly 28% increase in office space available for sublease according to CoStar. For businesses that have needed to downsize or that have succeeded in the work-from-home experiment to the point that remote work is permanent, contracting their office space may make economic sense. Subleasing is one alternative, with a third party coming in and occupying a portion or all of the empty space. Cohabitation means that you are officing together, with fewer boundaries and more shared space. If you are the owner of an office property, there is a live market for people seeking to occupy new space.
Similarly, for businesses that are looking at doing something a little different, making a move to a new location, or expanding their presence, subleasing or cohabitating can be a cost-effective solution, particularly since pricing is generally better than pre-COVID-19. Benefits include flexibility and furnished spaces—and in today’s market, can open up negotiating points such as free rent periods or tenant improvement allowances.
Whether you want insights on trends in a specific asset class, or assistance in building your strategic plan for selling, buying or leasing commercial real estate assets, R.O.I. Properties is here for you. Contact us at [email protected] or 602-319-1326.
The outlooks for individual commercial real estate sectors continue to change rapidly due to the ongoing impacts of COVID-19. For the most up-to-date information and analysis, please follow R.O.I. Properties on LinkedIn: