How coronavirus is reshaping our entire industry
The recent coronavirus pandemic and associated social distancing guidelines have caused numerous negative effects on our economy, not the least of which is the loss of an unprecedented number of jobs. However, there have been a handful of silver linings that have come about in the wake of the COVID-19 crisis, including various technological advancements that have been fast tracked and quickly adopted by the commercial real estate industry, as well as a greater sense of community even in the absence of physical gatherings.
Although working from home is not a new phenomenon, prior to the pandemic, this approach was not widely used across the commercial real estate sector. Once it became apparent that the coronavirus was going to impact the way firms conducted business, our industry was forced to implement work from home protocols essentially overnight. In order to stay fully functional in this new environment, real estate companies quickly embraced digital communication products that had not previously been widely used and revised certain procedures in order to adhere to social distancing regulations.
In addition to the COVID-19 crisis changing the physical working environment, firms also needed to be able to process a vast amount of information in a very short timeframe given the ever-changing legislation related to the pandemic. New federal and state policies forced corporate resources to shift their focus in order to digest the new requirements and translate them into functional procedures for on-site teams. We accomplished this through daily conference calls and utilized mass communication efforts to disseminate the information to all levels of the organization.
At the property level, prior to the pandemic, inperson tours for prospective residents were the norm. This standard needed to change quickly given the social distancing guidelines and the risk that physical proximity now posed to apartment staff and prospects. Grand Peaks already was in the process of creating virtual property tours prior to the virus hitting the U.S., however, we needed to fast track the process once multiple states implemented their respective stay-at-home orders. Within just a few days, we shut down all in-person leasing operations and implemented virtual property tours, consisting of 3D tours of model units, vacant floor plans and amenity spaces across our national portfolio of properties. Although total traffic and tour counts have been down across our Colorado portfolio in comparison with this time last year, virtual tours appear to be just as effective as our Colorado portfolio’s closing percentage increased 20% year over year from mid-March to mid-April.
Not only has the coronavirus impacted the leasing experience, but also it has changed how property management companies communicate with residents and try to build a sense of community. Most operators now have adopted 100% digital communication and have become more creative when it comes to planning resident events, including free virtual personal training sessions, virtual game nights and closet cleanout challenges.
Social distancing guidelines also have impacted the way real estate debt and investment transactions are conducted. Real estate brokerage firms are using similar technology and approaches to market their investment sales listings through virtual property tours. Lenders have adjusted their standard practices, including leaning more on local third-party underwriters to complete on-site inspections and relying on photos and video conferences to virtually “walk” properties. In certain instances, lenders have been more willing to accept digital signatures and multiple counties have pivoted to exclusively recording their documents electronically.
One of the most positive aspects to come from our industry during the coronavirus pandemic is the real estate community’s desire to stay connected with each other and focus on keeping the flow of information seamless. Brokerage firms were quick to set up weekly webinars and podcasts ensuring that everyone in the industry was able to access real-time information. There also have been numerous calls with industry leaders as panelists, shedding light on how their own portfolios have been affected and the steps they are taking to adjust to this new normal. Furthermore, working from home has added a more human element to our normal workday. We now get glimpses into some of our colleagues’ home lives, including kids, spouses and pets. To start and finish each phone call with a genuine “how are you” and “stay healthy” gives me a greater sense of kinship with my colleagues.
Still, questions remain regarding what our industry and day-to-day lives will look like post-COVID-19. Has the ability to virtually tour a property changed the mindset of the consumer forever and therefore shifted the dynamic of the typical leasing agent? Will acquisition people be less inclined to travel in order to save time and money? Will virtual happy hours, webcasts and training sessions stay the norm? Our leadership believes that many of these changes are here to stay and will be investing heavily in technology solutions and training as our industry continues to evolve. It is hard to say for sure what the new “normal” will be post-coronavirus, however, what I do know is that our industry’s adoption of technologies, ability to quickly pivot and willingness to come together in the face of the pandemic will ensure our collective success in the wake of this black swan event.
Featured in CREJ’s May 2020 Multifamily Properties Quarterly