Phoenix Real Estate Leaders: ‘Guarded Optimism’ for 2021

By Corina Vanek | Phoenix Business Journal

Some areas, particularly users of industrial real estate, continued to do well during the pandemic as many people shifted their buying online, bolstering an already strong industrial market in the Valley in 2020.

“We had record numbers on the industrial side and that’s not going to change,” Mark Seale, principal and director of brokerage services for Avison Young in Phoenix said. “We’ve had record numbers in multifamily sales. Data centers will continue to do well and life sciences will continue to grow.”

The Valley has several life sciences projects, such as the Wexford Science + Technology building in downtown Phoenix, that have come online and will create jobs and attract more companies to the area, Dean Volker, research analyst with Avison Young said.

Industrial projects, including those around SkyBridge in Mesa, the inland United States-Mexico port at Phoenix-Mesa Gateway Airport, will continue to gain momentum, Volker said.

The Valley was nearing a natural cycle in office construction where many high-profile buildings were coming online at the same time near the beginning of the pandemic, Volker said, creating a “bit of a pause” in construction even before the pandemic forced closures.

Seale said that as 2021 continues and COVID-19 vaccines get more widely distributed, corporate expansions and relocations, which were already strong in Arizona, will continue to grow as companies get past the uncertainty of the pandemic.

“The speed of the deals will increase dramatically,” Seale said.

Along with company relocations, Arizona continues to benefit from people moving from California, which Volker said has increased and is expected to continue.

Additionally, the trend toward flexible office space and co-working will likely accelerate in 2021, as companies seek shorter, more flexible lease terms, Seale said. Landlords are likely to get into creating flexible office spaces themselves, rather than leasing to a co-working operator.

“Office lease terms will remain a little shorter,” he said. “Especially in the first half of the year, it won’t be too much different.”

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