The term is used to indicate when there is a change of tenant, in which he leaves his operation in a specific area to start renting another in more modern developments.
Adopting the flight to quality means that a company has chosen to move its business to a high-standard area for all its employees and operations, concerning the technical specifications or location.
Now that you know the concept let's detail the particularities involved in a flight to quality movement, mainly in the office and logistics condominiums segments.
What can drive such a movement? It is common to see flight-to-quality happen in times of crisis when tenants take advantage of the rising supply versus falling demand to negotiate lower values per square meter in developments with higher standards and/or in the most desired locations.
This type of movement can be risky, as the value of the sq meters can increase after the crisis scenario. Therefore, it is necessary to carefully analyze all variables before making any decision. Market experts also recommend an economic analysis of the market for more assertive decision-making at the most appropriate time.
Want to learn more terms of the real estate market? At SiiLA Insights, you will find the main concepts of the sector here!
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