McGraw Commercial Properties manager, Neil Dailey, starts a second series of conversations, discussing commercial real estate in Q3 2020 with the various divisions of McGraw Commercial Properties.
Here are the highlights of the conversation:
The National Perspective
The office sector nationally is seeing about three times more square feet coming available in the sublease market. There is roughly 131 million square feet available for sublease across the country right now, which is up 32% from last year’s 100 million square feet. This is a significant increase after worldwide office leasing went down by 40% in Q2 of 2020.
Work From Home Challenges
At the onset of the pandemic there seemed to be signs of a major shift in the way offices conducted business, with many employers allowing their employees to work from home indefinitely. Now companies are starting to see the negatives of having everyone work from home, and a shift back to the office seems to be on the horizon.
The pandemic is still driving a lot of the decision making in the office sector, so investors and business owners are using new metrics for how they lease space. How many people are able to be in the building? What is the cost for extra cleaning? etc.
A sector that was seeing tremendous growth pre-pandemic was the coworking environment, which has undergone (and is still experiencing) big changes. There have been shifts from the more open spaces to flexible office solutions and scheduling of patrons. There has been a significant increase in inquiry in these spaces.
Overall, the Tulsa commercial market is seeing smaller space deals instead of larger deals. Leasing has slowed on both tenant and landlord sides, but with sales have continued at a rather steady pace.