Napa’s commercial real estate market softened by pandemic | Local News

The apparent slowdown isn’t just due to office properties, he added. Commercial use in retail has also been impacted as these tenants are no longer able to relocate or expand their businesses at the pace they were before the pandemic.

It’s a dynamic that is not exactly welcomed by landlords, said Gularte. Commercial real estate is traditionally at the top of the real estate investment hierarchy – “You start with a single family home, then a duplex, then a fourplex, then an apartment building, then a commercial one,” he said – and when the time comes, it could be slow enough make investors rethink where they want to spend their money.

During the pandemic, a small number of commercial landlords actually provided “rent relief” by awarding the monthly rent. Most simply choose to allow their tenants to delay payment, which eventually becomes due, Strong & Hayden’s Fischer said.

As the economy revived, Fischer has seen a number of tenants jump onto land from landlords willing to grant larger concessions either through a lower permanent rent or through free monthly rents, he said.

Demand for other types of office space, including medical practices near the Queen of the Valley Medical Center on Trancas Street, had stalled before the pandemic, Fischer noted.

“In my view, the real opportunity for many of these medical areas on Trancas is moving to apartment buildings,” he said.