Q3 2020 Office Market Insights
by Shelly Branscom, CCIM
COVID-19 may not be going away soon, but that has not prevented the U.S. economy from rebounding. Americans are learning to live with COVID. Progress has been slow, and medical personnel are learning how to manage the virus while nursing the majority of its victims back to health.
The nation is on its way to overcoming the biggest challenge we have faced since World War II. Americans are eager to return to work following the spring lockdowns. Precautions to reduce the spread of the virus are becoming second nature, resulting in the job market rebounding more quickly than anticipated. Third quarter GDP growth is expected. Finally, third quarter profits for companies in the S&P 500 were 23% better than Wall Street analysts forecast – a reflection of the resilience of American businesses.
Although it may be a long and uneven recovery, the economy is once again growing! Resourceful Americans and business owners will enable it to remain that way! We are experiencing significant business and investment optimism, and most businesses are reporting they need to hire new employees in the next three months.
In Albuquerque, the office and industrial real estate markets remain robust! Business owners are taking advantage of the low interest rates and buying real estate. When the lease rate they were paying is higher than the loan payment on their new mortgage, why not? Landlords continue to report tenants are making their lease payments, enticing investors to continue to infuse their cash into New Mexico’s commercial real estate.
At a COVID-safe gathering of several Albuquerque brokers recently, those in attendance reported they are busy helping tenants renew or expand while assisting buyers with purchasing commercial real estate. Some in the group thought the office footprint will shrink with employees choosing to work from home. However, we all agreed there is a need for social interaction given higher productivity is reported when employees can collaborate at the office. I believe the office footprint will get bigger. While some employees will continue to work from home, others will need to be in the office. Those with compromised immune systems will require their own enclosed office where they are able to close the door should they deem it’s needed for health reasons.
We are social people. We are encouraged by the productivity of our fellow employees. We will all go back to the office, wash our hands and wear our masks. Both the job market and the economy will continue to rebound, and commercial real estate transactions will continue to come to fruition.
Shelly Branscom, CCIM is an NAI Maestas & Ward commercial real estate specialist who provides substantial long-term strategies and business planning services to her clients. She prides herself on thinking outside the box, enabling her to contribute unique solutions and outcomes specific to each of her clients. Learn more about Shelly and her listings.
NAI Maestas & Ward is a full-service commercial real estate company serving New Mexico since 1996. The company is a dynamic commercial real estate firm offering best-in-class real estate services in brokerage, property management, asset management, business brokerage and development services.