By AZRE
Larry Downey, a vice chairman at Cushman & Wakefield, has been in commercial real estate for 37 years (and counting). And while he clearly demonstrates the utmost commitment, admiration and appreciation for his career and chosen industry — especially in the relationships he’s built with his clients — Downey admits the current CRE landscape can be challenging. This is particularly true and applicable with respect to the office space sector, in which he specializes, and trying to figure out Arizona’s commercial real estate outlook for 2024.
Whereas other sectors have experienced momentum — industrial, for example — the office market continues to fluctuate in the wake of the pandemic, resulting in high vacancy rates combined with negative absorption.
As for when these down trends will improve and/or equilibrium will be achieved in the office sector, Downey predicts it won’t be until the close of 2025 (at the earliest), or perhaps — more likely — another several years and beyond. Until then, Downey says that the office landscape will continue to undergo what he describes as a “reset.”
“It’s a correction period that we’re dealing with,” he says. “In Phoenix, it’s almost a new normal with companies looking to downsize and rightsize their operations in the post COVID hybrid office model.”
