After COVID Dip, Potential Tenants Re-Start Office Space Searches

In the worst of the COVID-19 pandemic in March, there was a noticeable dip in the number of potential tenants searching for commercial real estate, but this may have started turning around in April and May.

A new online survey and data analysis suggests that would-be tenants are resuming their hunt for office space, although some prefer remote viewings instead of going in-person.

An online survey and internet search trend analysis by CommercialCafe found that a large percentage of potential tenants were ready to commit to signing a lease when they found the right space.

“Their responses suggest a sense of optimism, and a hope that–despite the slowdown–things will revert to business as usual,” wrote Commercial Cafe reporter Diana Sabau.

In April, more people were searching the commercial real estate listings on CommercialCafe. For example, there was a low point in the week of March 15 because listing searches were down by 27%. But in the first week of April searches were up by 1% and by the second week that had grown to 8%.

The analysis also looked at data through Google Trends about online search terms for “commercial real estate,” “commercial property” and “office for rent.” The popularity of the search terms were low in the middle of March. Since then there’s been an upward trajectory.

According to Commercial Cafe’s survey of 1,184 people, 44% of respondents were ready to commit to lease an office when they found the right space. Only 11% of them said they postponed their office search until after the pandemic ends. Also, 28% said they hadn’t decided yet. Others were still searching—but less actively—and some were in standby mode.

The pandemic has caused some people to stop visiting potential properties in person. In the survey, 22% of respondents said they looked at pictures and virtual tours to view properties, and 14% said they relied on virtual reality staging for remote office viewings. There were 8% who put their selection process on hold. However, 38% reported no changes in how they viewed properties, and 17% still went in-person but to fewer locations.

What about people who did enter leases? The survey asked them if they wanted more options and flexibility because of COVID-19. Among 534 people who answered, 49% still expected things to remain the same, but 25% said said they wanted a contract with a payment-deferral clause, and 19% wanted protection from eviction if they couldn’t pay rent because of the pandemic.

“As unlikely as it may seem, not all the changes brought on by crises—such as the one we are currently experiencing—are for the worse,” Sabau wrote. “While demand has gone down, traffic and survey data suggest there’s still room for a distinctive sense of optimism from prospective tenants, many of whom have not given up their searches for a suitable office space.”