AZRE | AZBigMedia
The Phoenix office market experienced a record-breaking previous year in 2019 that featured significant relocations and expansions to the region, and further continued to hold strong in the first quarter, according to a report from Kidder Mathews. However, the quarter ended with an unprecedented disruption to the industry in the form of COVID-19. As such, the trajectory of the local office market faces uncertainty as the extent and severity of the worldwide pandemic is unknown and continues to evolve at a rapid pace.
Prior to the recent outbreak of COVID-19, the Phoenix office market was benefiting from robust demand, fueled by a diverse economy, population growth and a growing talented labor pool. However, the nationwide and local economy took a major hit due to the impacts of the novel coronavirus. Although the long-term impact on the economy and market is uncertain, much of the region braces for what is expected to be a very unclear and challenging year ahead. In terms of the immediate effects, the office market has been impacted heavily as a vast majority of workers have transitioned to work from home due to the statewide shelter-in-place order that took place at the end of March. While it is too soon to tell, this could mean a reevaluation to office size requirements and new leases may slow over the next year as companies assess future cost savings from reducing their office footprint.
