President’s Message: Lessons Learned
As midnight approached on December 31st and the end of the year was in sight, there were all sorts of GIFs, memes and messages circulating, illustrating how anxious we were to finally close the door on 2020. The whole world was exhausted and eager to move on.
But I believe before we slam that door on 2020 and block it from our memories, we should take a moment to look back and reflect on the valuable lessons it taught us—both good and bad—and take them forward with us.
I, too, have pandemic fatigue and am beyond ready to move on. However, my exhaustion stems not just from COVID but also from the constant animosity, anger and vitriol on so many issues that only seemed to escalate to a boiling point in 2020. I am disappointed and disheartened by the numerous topics that have become divisive between families, friends, neighbors and coworkers. And I am disgusted that our children and grandchildren are watching adults behave in ways that we (should) teach them not to. We must do better.
So, what are some of the lessons of 2020 that I think are worth taking into the new year?
- Spend more time listening than speaking (or tweeting). Who knows, you may learn something new. You may understand someone else’s point of view. You may even gain a new perspective.
- Have more empathy for others. We don’t know what it’s like to walk in someone else’s shoes. But maybe if we do more of the first thing I mentioned (listening), we might just learn something about them and see things differently. We can’t judge someone else looking only through the lens of our own life experiences.
- We are better together. No matter what we are trying to accomplish—whether it be in sports, in battle, in our community, in our workplace—we are more successful when we work together, not separately. We saw that firsthand in our region post-Katrina when we finally decided to work collaboratively rather than parochially, and we are all much better for it.
- Treat others the way you wish to be treated. No matter what religion you may believe in, they all espouse some version of this basic humanistic value. How quickly and often we seem to forget this most fundamental teaching.
- Help others in need. During this challenging time, so many people and businesses are struggling, more so now than ever. Pay it forward and do something to proactively help someone else. My favorite quote (by John Wooden) says, “You can’t live a perfect day without doing something for someone who will never be able to repay you.”
These all seem so simple and yet sometimes so elusive. So, as we turn the page to 2021, move on from an exhausting year, and set our New Year’s resolutions of healthier goals, business accomplishments and plans, I hope those resolutions include looking outward and aren’t solely focused inward. A new year presents a perfect opportunity to make changes—right wrongs, try a little harder, be more open-minded.
This year, let’s all resolve to learn from the past, take the important lessons to heart, and set a better example for those that follow.
I wish you all a very Happy New Year…and a better 2021!
Marty
Now, Next & Beyond: The path forward for reentry into the office space
As the COVID-19 pandemic continues to rewrite the rules of daily life, both personally and professionally, every business must deal with the unprecedented challenges that few of us ever expected. We in commercial real estate need no reminder of the extraordinary times we are currently experiencing. The retail real estate sector remains the most immediately and directly affected economically by the coronavirus pandemic, with April rent collections down on average of 35% – 45%. Compare that with multifamily, industrial and office tenants, where rent collections are around 90%. However, regardless of the sector or market, the future remains uncertain.
Unlike other disruptions where we can point to a specific cause and implement a plan of action, the challenging nature of this new coronavirus, along with its systemic impact on almost everything we do, makes near-term planning a crapshoot. Hence the difficulty in not only containment but in planning just what our “new normal” will look like—particularly for the office environment.
As areas begin to stabilize and stay-at-home restrictions are lifted, businesses will start the process of reopening, reentering and recovery. The path forward for office landlords and occupants can be viewed in three phases: now, next and beyond.
Now
The “now” is what businesses are currently experiencing and how they are reacting to the situation at hand. A recent Gartner, Inc. survey of HR executives found that 88% of organizations have encouraged or required their employees to work from home. Additionally, daily usage of the Zoom meeting platform has increased more than 300% from before the pandemic. Companies are doing whatever it takes to keep their workforce productive and find creative ways to serve their clients and customers. The place and pace in which employees work may have changed, but if you are the CEO, leader or stakeholder of a company, your mind is centered on subsequent steps—what’s next? The social investments we have made and continue to make will determine how long we stay in the “now.”
Next
“Next” as it concerns the reopening of companies is what landlords and employers are focusing on—the “reentry” phase. As we begin to bring workers back into the office, the physical space and social dynamic of the workplace will undoubtedly change. Employers will first have to find a balance between those who don’t yet feel comfortable returning to the office and those who welcome a return.
What near-term solutions will employers and building landlords be required to put in place for the office environment as we transition through the phases of reopening the economy over the next few months? Obviously, the health and wellness of people will be paramount. Staggering schedules of the workforce coming back into the office, so there are fewer employees present at one time, and coming up with creative wayfinding around common areas and office amenities will be needed to address how we meet social distancing guidelines. Reduced touchpoints, cleaning procedures and sanitizing must be enhanced. New guidelines that change how we interact person-to-person with our coworkers and clients, like controlled access and visitor policies, will need to be determined.
Flexibility is going to be a critical factor once we start emerging from uncertainty over the next few weeks. If all goes well, distancing measures will technically be relaxed, but how many of the near-term policies and procedures will become long-term changes to how and where we interact with each other?
Beyond
“Beyond” is an extension of “next.” As “next” is considered near-term, “beyond” is long-term. It is believed that it takes approximately 66 days for a new behavior to become a habit. How many of the near-term policies will become permanent in the office ecosystem? Real estate owners and operators across every asset class are considering the long-term impacts of the coronavirus outbreak and required modifications that these shifts are likely to bring.
For example, the recent trend toward densification of the workspace may change, but the need for social interaction and professional collaboration—in a safe environment—will certainly keep us in the office. This could result in the reintroduction of hard separations between desks or staggered workspaces, plexiglass dividers or cough shields between coworkers, widened corridors, the continued use of Zoom and other teleconference platforms within the office for team meetings, the list goes on as far as space planners and social engineers can imagine.
Various data show that anywhere from 5% – 20% of the workforce that previously operated from company offices will become permanent work-from-home employees, potentially reducing the need for office space. Then again, as distancing and safety become part of our social psyche, and public health codes place occupancy limits on space planning, the employee-per-square-foot ratio will likely increase, producing an uptick in demand for office real estate. The obvious question is, will one offset the other?
Long-term corporate real estate decision-making will likely be put on hold for some time as we reenter the workplace. Fewer organizations are going to feel comfortable signing a 3- or 5-year lease for office space because of the need to maintain as much flexibility as possible. As tenants and landlords shake out how best to accommodate their mutual needs, the opportunity will lie in rethinking office space to make it more accommodating for employees, whether that means more or less square footage.
On the landlord side, owners with patience and enough working capital to endure the short-term volatility and initial stress of the post-pandemic lease-up will emerge the winners. They will maintain a strong presence in urban centers, with updated spaces that meet the “new normal” tenants will seek.
We don’t know what’s going to happen over the next weeks and months; the situation remains fluid and continually evolving. But as more businesses face various phases of now, next and beyond, the need for professional guidance and best practices and protocols will grow. Please contact us to learn more about how we can help you during these next critical steps. Stirling Properties’ advisors are experienced in all aspects of commercial real estate, including retail, office, industrial, healthcare and multifamily sectors.
Stay safe and healthy.
President’s Message: Your urgent help is needed
We are all experiencing the unprecedented ramifications of the COVID-19 pandemic. While the safety and well-being of our people are our highest concerns, many are also struggling with their businesses and livelihoods.
We are just at the beginning stages of difficult times for the retail real estate industry, especially for many of our retailers. Countless restaurants and stores have been forced to close, and others have voluntarily closed, or sales have been greatly diminished. It’s important to note that 1 out of 4 U.S. jobs is related to retail—this will affect you, your friends and family.
We need your help. Congress is currently debating relief efforts for businesses and individuals affected by the COVID-19 crisis. Please contact your elected officials and urge them to provide federal assistance.
ICSC has made it very simple to contact your Congress members and legislators through an easy to use portal – HERE—or copy this url and paste in your web browser: https://p2a.co/65LiaWv. It’s essential to act quickly.
If you have not had a chance to reach out, please take a minute to do so. This legislation is crucial to the retail real estate industry and our companies. The long-term strength of the shopping center industry is critical to the economic, civic and social viability of communities across the country.
Please feel free to share this message with friends, family and like-minded colleagues, and on your social media channels.
ICSC is reporting that our efforts are working…Congress hears us! We need to keep the momentum going. Every voice counts in helping retailers and small businesses get through this crisis.
Thank you,
Marty Mayer
