Demand for commercial real estate could change due to pandemic
The demand for commercial real estate has changed since the pandemic began. With many businesses closing, they may have to sell their properties. On the other hand, some businesses need more space to properly social distance.
Do any businesses need this space that’s up for rent?
“I think the answer to that question is probably no,” said Tom Smythe, professor of finance at Florida Gulf Coast University.
Smythe said you may see more for sale signs in business windows soon. Some may have to close, while other companies are renegotiating their leases.
Because of the pandemic, not everyone is going back into the office physically. “Some companies that choose to stay remote,” Smythe said. “And others that say no, that’s not the direction we’re gonna go in.”
So instead of office buildings, more people will be in home offices. “Before we had exam rooms for every doctor that was in a practice,” Smythe added. “Now, with telemedicine, we may have found a way for some doctors to from home.”
Realtor Gloria Tate, with Raso Realty, said, “We really haven’t seen a vacancy rate to say ‘oh my goodness, we have empty buildings.'”
Tate does think that places in Southwest Florida such as hotels, barber shops and restaurants will stay where they are. This could keep the commercial real estate market open for business and investment.
“I drive up and down our major streets in Cape Coral and you do not see a lot of empty space,” Tate said.
But, as the pandemic rages on, things may not stay that way.
“There will be changes, whether that comes immediately or as leases expire,” said Smythe.
Tate did confirm that the residential housing market is strong, keeping demand high in Southwest Florida.
She said when she sees one business leave, another comes in to replace it.