A bi-annual survey of commercial real estate industry participants nationwide by a leading trade group last month found that most remain pessimistic about prospects for a full recovery by this time in 2021.
The NAIOP CRE Sentiment Index, a survey based on a scale of 1 to 100 in which a score of 100 represents the most optimistic outlook for the next 12 months, remained at 45 in September — the same score as in March, when the COVID-19 pandemic first began disrupting the U.S. economy and society.
The sentiment index’s score then, however, represented a five-year low and the first time it had fallen below 50, highlighting what many believe are “unfavorable conditions” ahead.
In the Tampa Bay area, by contrast, commercial real estate developers, brokers, landlords and others believe that the Gulf Coast will fare better over the coming year thanks to a steady influx of new residents and subsequent business prospects.
“There’s not a clear path at the moment, and most people I talk to believe we’ll remain in a fluid situation for the next 24 months at least,” says Pat Kelly, regional managing partner for Franklin Street, a Tampa-based brokerage and management firm.
“Because our firm does a lot of tenant representation, we’re at the forefront of behavioral thought, and what we’re realizing is that not all companies are approaching the economic environment here the same,” Kelly says.
For his part, Kelly believes ultimately that more Northeastern companies will adopt a “hub and spoke” approach to office utilization going forward, in which they maintain a headquarters in New York, Boston or Chicago but occupying considerable space in cities such as Tampa.
“The world has not stopped in any respect,” he says. “But we are just going to have to keep on figuring this out.”