Real estate broker: Working from home could help smaller markets like Albuquerque

(The Center Square) – COVID-19 caused an unprecedented shift to working at home, leaving many office spaces around New Mexico empty, but one expert doesn’t expect this to stick.

Joe Farr, 2020 chairman of the NAIOP Commercial Real Estate Development Association, current chair of Albuquerque Economic Development and a 40-year veteran real estate broker, points to the latest U.S. Commercial Real Estate Services (CRES) report stating Albuquerque’s square footage of newly leased office space actually grew in 2020. CRES is an international real estate company with an office in Albuquerque,

For high-density cities like New York or Chicago, the coronavirus crisis has indeed resulted in a lot of empty office spaces, Farr sais. For places like Albuquerque though, it’s actually been a boon as jobs and people shift out of high-density areas.

“I think that what’s happening right now is going to hurt the bigger cities, it’s going to help smaller markets,” Farr told The Center Square.

Farr doesn’t think the shift to working from home will be permanent. He points to a quote by Sam Zell, Equity Office founder, with whom he agrees:

“We are social animals,” Zell said, as quoted by Farr. “We interface with each other. We create progressive results from one-plus-one-equals-three. As soon as the central business districts are back and alive and vaccines are pervasive, you’re going to see the office space market go back to where it was before.”

Farr adds that he doesn’t think this is going to be an immediate thing, but will happen in a year or two.

Cushman and Wakefield did a national study in December on lease renewals. The firm found lease renewals actually grew in size by 2.2%, Farr said.

Prior to the pandemic, the trend was to shift people into smaller workspaces, but since social distancing protocols are the norm, companies are looking to increase space between workers, Farr said.

“Think about that for one second,” he said. “Everybody’s talking about how offices are going away and how you’re going to get rid of office space for work from home, yet out of all their renewals they grew by 2.2%.”

Farr said office spaces are going to fill up again, but they will look different.

Scott Whitefield, president of Colliers International in Albuquerque, told KRQE he expects a drop in the commercial market, but he also echoes what Farr said.

“There are tenants out there that realize they don’t need an office, but I think there are a lot more in the way of tenants that just realize that their office has to change,” Whitefield said. “And what that looks like moving forward, again is one of those things that’s sort of an unanswered question.”

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