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How Commercial Real Estate Will Change in a Post-Pandemic World (BOMA 2020)
What will commercial real estate look like post-pandemic? This question kicked off the 2020 Virtual BOMA International Conference & Expo session titled “Post-Pandemic Outlook for Commercial Real Estate.”
Panel moderator and new BOMA International chair and chief elected officer Shelby Christensen (watch a video interview with her here) first asked the three panelists—Marla Maloney of Cushman & Wakefield, Brian Sutherland of Yardi and Sheryl Schulze of Gensler—how they’ve adapted amid the coronavirus crisis. Items mentioned included refining communication to tenants and vendors/partners (“You can’t over-communicate these days,” Schulze said) and looking at the healthiness of a building as an amenity.
“Amenities used to be the differentiator [for a building],” Schulze said. “Right now, the health of a building will be considered an amenity, whether it’s touchless interfaces or bringing in more technology to support moving through a building and getting the things you need.”
Panelists also addressed how the role of the office will change. Because of the success of working remotely, it’s likely tenants won’t return to the office for solely focus work, but instead for collaboration and strengthening socialization and cultural connections. Technology tools and movable furniture will also be sought after.
When it comes to leasing, rent and tenant footprints, Christensen said she’s seen many in the industry take deeper looks into risk with their tenant base.
“There’s no one size fits all solution here,” Maloney added. “For the most part, it’s been reactionary. The most common thing we’ve seen is just rent deferment with interest until 2021. We’ve seen some rent abatement and lease extensions. We’re also seeing, on the new lease side, people are looking for shorter terms then previously considered.”
But panelists agreed that the physical office isn’t going anywhere—its purpose and design will just look different. Connectivity infrastructure, such as 5G, will be more important than ever, and a hub-and-spoke model might become popular, where an organization has a hub office and then a series of satellite locations.
They also suggested that owners look into things like bike rooms with showers—a solution for tenants who might be put off by public transportation—and creating more spaces for tenants to get fresh air, such as carving into your building footprint to create outdoor terraces.
The panelists also advised owners and managers to continue to be nimble in this ever-evolving climate.
“We need to continue to evolve with what’s changing and have executive leadership at organizations that can really adapt quickly and make changes and ensure business continuity,” Sutherland said.