NAIOP: Uncertainty Driving Arizona Real Estate Market Pessimism

Article originally posted on Phoenix Business Journal on May 15, 2020

Like most industries, the novel coronavirus has left the nation’s commercial real estate leaders with high levels of uncertainty.

The twice-yearly sentiment index conducted by NAIOP, which was done near the beginning of the March closures due to the Covid-19 pandemic, showed real estate professionals expected unfavorable conditions in the market during the next 12 months.

The latest survey represented a large shift from the previous survey in September 2019. At that time, conditions for all components were expected to remain favorable, except materials and labor costs. By the March 2020 survey, the only component expected to be favorable was employment.

Suzanne Kinney, president and CEO of the NAIOP Arizona chapter, said the group’s members have settled into more acceptance and understanding of what the pandemic is shaping up to be, and are now learning how to adapt to the new conditions.

“The uncertainty was driving some of the pessimism, and there’s still uncertainty, but it’s not as severe as it was,” Kinney said.

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Suzanne Kinney, president and CEO of the Arizona Chapter of NAIOP.