By Mike Sunnucks | Rose Law Group Reporter
The workplace and public health upheavals of COVID-19 could have some longer-term impacts on office space and commercial real estate development.
Craig Krumwiede, president and CEO of Harvard Investments, said public health concerns over the Coronavirus challenge high-rise office buildings in more densely populated markets.
“Getting someone the comfort to get in a high-rise elevator with three other people, I think it’s going to be a long time before people feel comfortable with that,” Krumwiede said during Rose Law Group’s New Economy (Virtual) Power Lunch series on Friday.
“It’s a very hard problem to solve for a high rise,” Krumwiede said.
He said that could prove to be a competitive advantage for markets such as metro Phoenix which is less dense and has more suburban and low-rise office parks than other big U.S. cities.
”I think Arizona is going to benefit from this,” Krumwiede said during the Rose Law Group forum.
Harvard Investments has been involved in some major real estate developments in Arizona and other Western states including residential and commercial projects.
Krumwiede said workers and employers also might prefer commutes by car instead of public transit over concerns about COVID. “You can hibernate from the world in there,” he said of commuting by car instead of train or bus.
New York, Chicago and Boston have had some of the largest numbers of COVID cases in the U.S. New York, Minneapolis and Seattle have seen unrest and upheavals from the George Floyd protests.
Krumwiede also does not expect to see speculative office development anytime soon with COVID-19’s upheaval on the economy and social distancing impact how and where people work.
“Offices will only be built when they have tenants for them before they break ground. I just don’t see us going back to spec offices,” he said.