WALNUT CREEK, CA—Before the global pandemic that roiled theeconomy and commercial real estate industry, commercial real estatebrokers were noting a growing trend of companies moving out ofdense West Coast markets. Faced with rising prices, and lack ofoffice and industrial space, along with the rising cost of housingand business taxes, many small- and middle-market enterprises wereunder pressure.

The cost of doing business and heightened competition in topmarkets such as the Bay Area, Silicon Valley and the Los Angelesmetro was untenable, and companies began to set their sights oninland markets. The COVID pandemic is projected to accelerate thistrend, according to Ed Del Beccaro, executive vice president withTRI Commercial/CORFAC International.

In California's major markets pre-March 2020, vacancies weredecreasing in every sector except retail, which had exhibited anoverall demand dip regardless of location. At the same time, theaffordability and availability of housing in California were makingit difficult for working- and middle-class people to find homes. In2019, Census data showed that more people had moved out ofCalifornia than had moved in for the seventh year in a row and aUniversity of California Berkeley poll found 71% of people citedhigh cost of housing as the top reason for wanting to leave thestate.