Office Spaces Doing Better than Foreclosed Single Family Houses

by on Real Estate Investing

Although foreclosed single family houses are offered at very low prices, not a lot of buyers are trekking to Arizona to purchase these properties. Lack of activity in the home-buying market has caused the residential property industry of most areas of Arizona to remain depressed. The commercial property market, on the other hand, is enjoying a revival in certain metro areas.

Big numbers of Scottsdale foreclosed homes and distressed residential properties in other areas of the state remain unsold for months, causing the distressed home inventory to expand in the state. However, the opposite is happening in the commercial property market as areas like Chandler and Scottsdale experience a surge in buying and leasing activities, particularly in the office space segment.

Although foreclosures for sale in Arizona remain a major problem in the state, the fact that commercial vacancy rates in certain sections of the region are declining might bring some relief. In Chandler, for example, the vacancy rate for the office real estate market was at 24.5% during the start of 2010. As of January 2011, the rate has declined to 13%. According to commercial realtors, big name companies like eBay and Safelite Auto have leased huge spaces in the area in the past few months.

Real estate industry observers are predicting that buying activities involving foreclosed single family houses and other types of residential properties will remain much the same this year as last year, with activities remaining at low levels. For the commercial property market, they are predicting the opposite.

They expect more companies to come in to Arizona and occupy office spaces in markets like Chandler, Mesa, and Tempe. Although a big percentage of bank foreclosed houses in Scottsdale will remain unsold during the first few months of 2011, its commercial spaces are expected to be grabbed by property buyers and leasers as Scottsdale, which is predicted to maintain its edge over other commercial property markets, including Chandler.

According to real estate experts, although realtors found it hard to sell foreclosed single family houses and other residential units last year, this might change this year as more companies enter the Arizona market. Experts are hoping that the improvement in commercial real estate will spill over the residential industry.

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