Course 15:

Effects of COVID-19 on Commercial Real Estate

Michael J. Montante

By: Michael J. Montante

Chief Executive Officer

Returning to Work & the Effects of COVID-19 on Commercial Real Estate

Throughout Western New York, New York State and across the world, COVID-19 has been an unprecedented disruption this year. When businesses shut down or operated with only essential employees in early March, much of the world’s workforce was required to leave their worksites and quickly adjust to working remotely. No one was sure how long the new reality would last.

Early on, as we began to feel the effects and uncertainty of the pandemic, our company established a COVID-19 Task Force that worked to limit interruptions while ensuring the health and safety of our associates. As state and local governments released more guidance, we transitioned to remote work for much of our workforce. Many of our employees, such as Property Managers and Maintenance Mechanics, perform jobs that cannot be done remotely and, therefore, continued in their work environments. These employees supported our essential clients that remained open during the pandemic, such as Cardinal Health, Catholic Health and the Visiting Nursing Association. Now, as much of the country is in various phases of reopening, businesses must navigate the challenges associated with our new reality.

Reopening Challenges

In New York, the reopening of offices was handled in a phased approach, similar to the shutdown. Businesses had to look at how many people can fit in the space within the guidelines to achieve de-densification. Uniland was proactive in educating employees about how to mitigate against infection risks before returning to the office and we were quick to have our properties appropriately signed with valuable information about how to safely move through our buildings. We have also put policies in place that restrict travel for non-essential events and to states outside our own.

According to a June 2020 Gallup poll, 46% of U.S. workers were concerned about exposure to COVID-19 at work. The same poll showed that washing hands and sanitizing surfaces is the action used most by employers and workers, followed by maintaining distance, providing personal protective equipment (PPE) and working remotely.

The pandemic has concentrated our focus on office sanitation, personal hygiene, air circulation, physical distancing, and preventing sick employees from reporting to the office. The health crisis has also forced businesses to create or re-examine their contingency plans.

A New Era for the Office

As we reopen our workspaces, we have to find ways to balance the existing at-home workforce with those returning to the office. In terms of our role as a leading provider of office space in Western New York, we know that many businesses operate optimally when employees are in the office. Studies show that people enjoy office interactions, working together, socialization and gatherings.

The idea of companies allowing their employees to work from home permanently is not a sustainable long-term option for most businesses or their employees. During the coronavirus quarantines, adults were positioned to work at home with, most likely, another spouse who also had to work remotely, and children who had to complete their education online. The lack of in-person interaction with our peers and the ease of getting work done due to the natural “collisions” hampered productivity, collaboration and innovation. A company culture is strongest at the office and among physically engaged colleagues; daily Zoom meetings are not an adequate substitute.

As offices have reopened, we’ve seen a mix of 50% in the office and 50% working remotely to give the business time to make floor plan changes and other needed arrangements. Long term, offices will still be an integral part of operating and growing a business. However, one can’t paint every company with the same brush. Each organization will have to assess its needs for moving forward such as the space allocation per employee. Due to COVID-19, you can enlarge workstations or spread them out to meet de-densification requirements.

There are certainly cases where people can work as efficiently and effectively from home as they do in the office. However, one has to look at the situation of that individual, such as their productivity habits or the distractions they may have at home.

A Safe Workplace Environment

At Uniland, we have implemented policies based on the best practices and guidance from the federal and local government, leveraging those from our facilities management associations, including BOMA and IREM.

Each morning, our associates complete a text-based COVID-19 assessment survey to ensure they are well enough to report to the office. As they enter our offices wearing a facemask, they see signage with our new standards and physical distancing reminders, numerous hand sanitizer dispensers, and self-cleaning technology in high-touch areas.

For the long term, we have to evaluate the evolution of these trends to see which changes will be permanent. It would be naïve for us to think that there won’t be some permanent change to our daily lives at the office, at home, while shopping and as we dine at restaurants. COVID-19 has highlighted people’s understanding of how germs and viruses spread, which will certainly generate some permanent change.

This new landscape is affecting how we interact with our built environments, such as office buildings. As CBRE highlighted in a recent webinar, an employee or visitor may encounter health metrics when entering the building, including temperature sensing thermal cameras and touchless access to entry points and elevators. Additional modifications may include enhanced air sanitation and HVAC control systems and more digitization to enable more contactless service. For example, new elevator systems will take you to your office floor when you scan your work badge in the lobby.

Healthy Design

The pandemic will help catalyze new building technologies and breakthroughs. Going forward, approaches to how we outfit, construct, build and maintain buildings will continue to evolve. Facility features to advance health and safety will be more prominent. These new approaches will compliment recent advances in more environmentally friendly development and Universal Design for an enhanced user experience.

COVID-19 will change the trajectory of certain development trends such as the already dying ‘open office’ environment in favor of one that gives employees their own space without being side by side like traditional cube farms. In terms of business operations, companies will further embrace collaboration technologies such as virtual meetings, instant messaging and digital project management solutions.

Looking Ahead

As we have all experienced, COVID-19 has been a major disruption to our daily lives and how we work. It has elevated the importance of health and safety while highlighting the value of personal connection and in-person experiences. Human contact is now a prized asset. Moving forward, companies will have to evaluate these elements as they return to their offices, recruit talent and compete in our new reality. Based on what we have developed for our associates and how we are supporting our clients, we are on the cusp of a new era of workspace. Let us stay safe as we build it together here in Buffalo, in Rochester and beyond.

 

Sign up to receive future Uniland University courses.