The repeated phone calls are not only from Landlords and Tenants, but more so lenders, appraisers, media and real estate trend companies that revel in data to make decisions. CoStar, LoopNet and others ask us for insight into what is next. As we were in 2008, 2009 and 2010, we remain the experts in our industry and have an answer.
The Shadow Effect of CV19 lingers amongst us and it will affect Northern Nevada. The pessimistic ideal drives vacancy to record highs. In 2010, we volleyed between 20-22%. The optimist counters this ideal with the fact that the most basic economic factors of Northern Nevada are sound. And, thus, the office market may not grow as rapidly pre-CV19, at least for the next 18-24 months. But, compared to 20-year trends, the office market is still very stable, will adjust, and improvise appropriately based on the success of industry diversification.
Global real estate firms tend to report on space efficiency, yet neglect to report on employee efficiency. Yes, we have advised clients on space efficiency exercises that may reduce their total occupancy costs. That said, the market still lacks the data to judge the impact of reduction of collaborative workspace and its impact on teammate production.
Don’t get me wrong, there will be a shadow effect and vacancy will rise. On the other hand, get me right; the wake of CV19 will provide another reason for companies to consider Northern Nevada as their headquarters and consult advisors on smarter workspace. For example, as the Nevada economy re-opens, the economic development authority’s supported market to market cost savings comparison to the Bay Area may exceed a 40% advantage. This will fortify that the shadow effect may trigger smarter workspace, office design ingenuity and an even greater demand to live and work in a great community. We recommend you call your commercial real estate advisor at DCG and let’s create smarter, more impactful and productive work environments that will boost the bottom line.
Written by: Dominic Brunetti, CCIM – Principal at Dickson Commercial Group