“Amazon and Mall Operator Look at Turning Sears, J.C. Penney Stores Into Fulfillment Centers”, “Facebook Doubles Down on Working From Office with Huge Lease in New York City” and finally, “REI to sell its never-used Bellevue headquarters and shift office work to multiple Seattle-area sites”. These are just a few of the headlines that are grabbing readers’ attention and causing whiplash. Business decision making historically relied on information from scientifically appropriate sample sizes and enough time to collect data. Right now we look to anecdotal evidence like the headlines above, rely on good sources, and make educated guesses on what’s to come. The data is coming but decisions still need to be made today. While the scale of the impact of the coronavirus pandemic is new, uncertainty itself is not.
Commercial property owners are in the thick of responding to the devastation of small businesses at the street level as small retailers close and big retailers downsize their portfolio of leased space. Certain sectors of businesses are thriving such as grocery stores, pharmacies, residential construction, and Amazon. Office leases are being right-sized and negotiated. Brokers are busy. Building owners have responded heroically to the crisis at hand and are in the process of stanching the outflow of tenants and welcoming the new crop of businesses. Managing continuity is the prime directive to keep leaseholders happy and buildings occupied.
Moving from crisis mode to a thriving state requires a long view, a look back at the data from disruptive economic events, and a leap into a chosen investment path. Deloitte Insights: Covid implications for Commercial Real Estate (April 2020) presents a detailed look at data from the U.S. Federal Reserve Bank during previous economic shocks from the 9/11 terrorist attacks to the global financial crisis and Swine flu epidemic of 2008 provides an analysis of the recovery time for commercial real estate (CRE).
“There is historical precedence for dire predictions that turned out to be false or overblown. After the global financial crisis in 2008, people were surprised by the ways in which city centers came back to thrive. So, we shouldn’t underestimate the ability of cities to rebound.”
— Eric Hawkinson, Urban Planner and Link2Lift Impact Partner
The bottom line is, recovery is coming, and preparing for the next normal can start today.
Reimagine Space: Recovery Planning
To start recovery planning, data alone isn’t enough to predict the future needs of commercial real estate. Relying solely on traditional economic or customer survey driven approaches does not consider emotional processes or the “why” of the data. Physical distancing as a requirement of a healthy working environment is a perfect example of a factor that might not make sense if we look only at data.
“CRE emerges from this pandemic looking different than it did before the emergency. Industries, regions and property types will recover at different speeds. Services such as property management, space design, construction, appraisal and analytics will become increasingly important. Brokerage will take a back seat to consultative advice and strategic planning.”
— Maria Sicola, CityStream Solutions and Integrity Data Solutions
It is our point of view that the changing landscape of commercial real estate will demand an innovative approach to protecting the customer and employee. Meeting these needs cannot be summed up by a mandate. It will take intentional listening and over communication to build the emotional capacity and trust to enter a commercial property. It is our observation at Link2Lift that much has changed around the world, but the need to have excellent and authentic discovery prior to making design decisions with physical space may be the deciding factor for whether or not the new commercial building thrives.
“To move forward and thrive, real estate leaders are looking for ideas beyond traditional sources and consider what psychologists, sociologists, futurists and technologists have to say. “
We believe that research and workshops to build architectural strategy are needed now more than ever, this has always been the approach with Link2Lift.
Creating a Post-Covid Architectural Strategy for Commercial Real Estate
Consider the history of a building. The physical space may have served as an anchor on Main Street, or perhaps a church where many members of the community were baptized or married. Emerging stronger from this crisis may require moving forward from the building’s original purpose and reimagining the way the building can be inhabited in the future. Formulating such a plan requires an experienced and trusted partner to navigate a building’s historical use, stakeholders’ feedback, and the space’s future purpose.
CRE will be forced to build flex use spaces in a post COVID-19 world. The pandemic has accelerated the move towards working from home but collaboration among workers has suffered. Building spaces for safe collaboration in the office and virtually while keeping the work in flow is a challenge that requires innovative solutions.
— Sheri Lozano, CEO of Link2Lift
Link2Lift is an experienced architectural strategist. Our team has earned the trust of global impact organizations by guiding them through the process of inhabiting spaces with new purpose.
Link2Lift has the ability to be a programming partner for architecture firms and construction companies. It will take a collective approach to build the new commercial landscape.
