By Chris Keeley,
Phoenix Commercial Brokers
Well, we’ve never seen this before, have we? I saw a lot in my 22 years on the fire department in Tucson but I never saw anything like this. The health crisis is obvious and I’ll leave it up to the medical experts to try and figure all that out. We all have personal tragedies and stories about this pandemic we could tell. I’m not writing this story to share mine. I’m writing this to give an update on how this real estate market has been affected by this unprecedented disaster.
I’d like to give my opinion on what affect this quarantine is having on the real estate market. More specifically what I’m seeing in the Deer Valley Industrial Airpark real estate market. It certainly came on us fast, didn’t it? I had a client cancel escrow on a perfect building one week after she put it in escrow, about mid-February. She told me her business depended on conferences and she was worried they might be cancelled. I was skeptical but she was worried. She was way ahead of the curve for sure. Her instincts were right on and she probably saved herself from bankruptcy following her initial instincts. That was my first indication this might be something that could affect our business. It hit us all out of nowhere and within two weeks two more of my escrows fell out. This was before we were ordered to shut down, shelter at home.
When the shelter at home orders came out, our phones went dead. Most every deal I was working on disappeared. The panic was real and my industrial market had shut down. Many of the brokers I work with said the same thing. It really made me think “how bad can this get?” We were thriving in a wonderful market with pricing back to near record highs. Our vacancies were way down. Rental rates were at their highest in a decade. My great concern was it was all over and done.
I am happy to say it doesn’t look or feel over and done now. In the last two weeks I’ve seen a surge in activity and offers. It feels like we hit a speed bump and we maybe could walk away from this disaster with minimal damage in my market. Certainly with a 14% unemployment rate I expect we’ll see some decreases across the board but the Deer Valley Airpark is still short on inventory with good activity today. I think when we get closer to normal we could see quite a surge in this market.
The Deer Valley Airpark is still short on inventory and I would expect developers to start to look here soon to add product. We could come back from this stronger than ever. I expect we will.