COVID-19 has caused the biggest economic disruption since the Great Recession — and we’re not out of it yet. That’s why Yardi, BOMA International and Brightline Strategies joined forces to survey over 3,000 commercial real estate decision-makers.
We wanted to know: How is the pandemic transforming the way we work? Are these changes lasting or temporary?
This groundbreaking COVID-19 impact study finds commercial real estate is at a critical inflection point.
Let’s take a look at the biggest takeaways from the survey, which was conducted in September and October of 2020.
Major findings for commercial real estate
Here are some of the biggest takeaways from the study:
- 78% of respondents approve of the response their current property owner/operator implemented during COVID-19
- 77% of respondents are confident they understand how to reduce and manage risk in their physical office
- 65% of commercial office decision-makers continue to see significant value in on-site business operations, particularly as it relates to collaboration, coaching and culture
- 61% of respondents report they will reassess space needs
- 47% of all tenants say their landlord’s coronavirus response has made them more likely to renew
- 33% of respondents say they have experienced at least a 25% revenue decline since the onset of the pandemic
Taking in the big picture
Despite pandemic-related challenges to where and how we work, office space isn’t out of the picture — not by a long shot!
That’s according to Henry H. Chamberlain, APR, FASAE, CAE, president and COO of BOMA International. “While study results indicate high probabilities around changes in size, use and design of office space going forward, we have also seen a significant rebound in … physical work environments since the [start] of the pandemic,” he said.
Chamberlain also states that 75% of all study respondents believe their offices are vital to their long-term business plans.
Identifying the inflection point
When the survey was conducted, only 55% of respondents said they planned to renew their leases. This is much lower than the Brightline Strategies six-year national index of 78%.
Fortunately, that figure doesn’t tell the whole story. The likelihood of a lease renewal increases to 66% if properties add new services, amenities, features and spaces that address the pandemic.
This is the true inflection point, perhaps the most important statistic in the study. In other words, by making key operational changes, commercial property managers can retain more tenants. The difference could protect many businesses nationwide.
Predicting change
So, what’s going to change? In all likelihood, office spaces will be different in design and the way they are used. The post-pandemic world won’t see the end of commercial real estate, but we may see layouts that accommodate distancing and reduce or reposition common areas. This would have the added benefit of preventing employees from getting sick as easily.
Plus, flexible remote work policies and stricter occupancy limits mean people will likely be working from home more frequently, even post-pandemic. If you manage residential properties as well, this might be time to explore coworking spaces for multifamily.
Maximizing potential with property management software
Looking to future-proof your business? Take advantage of technology that will help you adapt to a changing market and meet shifting tenant expectations. Yardi Breeze is property management software that makes commercial property marketing, leasing and management refreshingly simple. Improve communications, eliminate spreadsheets and save time with automated CAM recovery, among other benefits.
Plus, Yardi Breeze Premier offers add-ons that enhance your capabilities:
- CommercialCafe Property Websites: Let tenants make lease payments, enter maintenance requests and submit retail sales data online
- VendorCafe: Centralize vendor management, payment and communication
- Investment Manager: Track capital commitments, contributions and distributions in one place
Get the full story
View the BOMA International COVID-19 Commercial Real Estate Impact Study executive summary.
To request a full copy of the COVID-19 impact study, contact [email protected].
