While cases of COVID-19 continue to be relatively low in the islands, the impacts of the pandemic are still being felt state-wide — and that includes in the world of commercial real estate.
The pandemic has shifted work habits — while other changes range from inflation to supply chains. Those are some of the trends PBN found in talking with commercial real estate brokers and developers.
In the office space market, businesses and their landlords are now focusing on creating “craveable spaces” to attract workers back to the office.
Serena Longo, vice president of CBRE’s advisory and transaction services division, says that since many white-collar jobs have a new permanence about work-from-home, employers that are seeking to build and maintain workplace culture are trying to turn offices into attractions.
Ian Clagstone, president of Standard Commercial and CEO of SC Capital, sees some tenants questioning their downtown office locations and relocating out to suburban areas. This is lowering their costs and giving workers shorter commutes when they do come in.
For managers of many commercial properties, the economics are in flux.
To keep and retain tenants, rents have been dropping, but in some cases not enough to cover the owners’ operating expenses, making commercial real estate a riskier venture.
Maintaining and improving commercial properties is tougher now, too, as construction costs have risen 4% over the past year.
