As the situation rapidly evolves, managing properties during the COVID-19 outbreak is challenging. However, with the number of confirmed cases in Colorado increasing each day and Gov. Jared Polis predicting thousands more have it at his March 16 press conference, it seems safe to say it’s now a question of how the pandemic is impacting your assets, not if it will.
For weeks, we’ve been advised about some of the basic tenets of fighting the spread: Wash your hands for 20 seconds, don’t touch your face, don’t go into work if you’re sick or have been exposed to the virus, practice social distancing, etc.
The Colorado Department of Public Health and Environment issued further guidelines in public health orders to close bars, restaurants, gyms, theaters, casinos and salons/spas until April 30 to slow the spread. Restaurant take-out and delivery service still is allowed. The CDPH also is following the Center for Disease Control and Prevention guidelines to cancel or postpone in-person events that consist of 50 people or more for the next eight weeks.
On March 16, the CDC also advised older people to “stay home and away from other people,” for everyone to work from home whenever possible, avoid social gathering of groups of 10 of more, and avoid discretionary travel, shopping trips and social visits.
Taking it further, right before print, Denver Mayor Michael Hancock issued a “stay at home” order for all Denver residents. While there are exemptions for “essential” businesses, the impacts will be far reaching.
Personnel essential to the safe operation of buildings, including managers, engineers, technicians, plumbers, electricians and janitorial staff are covered for travel under the order, Denver Metro BOMA confirmed with the Mayor’s office.
These guidelines impact just about every commercial real estate asset class. So, for building managers of assets that aren’t fully shut down, what should you be doing?
One of the best places for guidelines specifically geared to property management is the Building Owners and Managers Association International, which has a resource center dedicated to the pandemic on its website, boma.org/coronavirus. The association produced a preparedness checklist, update March 4, that shares several guidelines:
• Communicate with tenants and staff. This includes establishing a process to share information with staff and tenants and staying engaged with state and local health departments to keep a pulse on what’s happening within your community.
• Prepare your tenants and staff on following proper sick policies. Additionally, managers should connect with third-party vendors to make sure they have similar guidance for their employees.
• Plan for business continuity. Managers should identify essential business functions to maintain operations, and make plans to deal with increased staff absentees and supply chain interruptions. Other suggestions include cross-training personnel to perform essential functions; consider flexible work sites or hours to increase physical distance between employees; ensure IT infrastructure is ready to handle people working from home; and encouraged local managers to take appropriate actions if a portfolio contains properties in more than one market.
The BOMA International guidelines also provide best practices for cleaning during an outbreak as well as supplies to keep on hand – think tissues, soap, alcohol-based hand sanitizer, disposable wipes, no-touch disposal receptacles and routine cleaning products.
Another association offering guidelines for managers is the Apartment Association of Metro Denver, which issued a release March 13.
“It’s important to remember that every apartment management company will handle this situation differently depending on what’s best for their communities, but that their top priority is the health and well-being of their residents and employees,” said Mark Williams, executive vice president, AAMD.
In addition to following CDC and CDPH guidelines, the association recommends ensuring everyone wash their hands before using building amenities and after using building amenities, particularly fitness centers. Managers should inform tenants to not use fitness centers and other amenities if they have fever, nausea, runny nose, chest congestion or the chills. Managers are encouraged to tell those tenants to “Please get some rest and spare fellow residents the likelihood of also getting sick,” the release said.
AAMD also recommends switching to online rent payment.
The association canceled, postponed or converted to video conference all meetings for the next eight weeks following national recommendations. Many other state associations and commercial real estate companies did the same. NAIOP Colorado has converted its operations into a virtual basis and postponed all events through the end of April.
Additionally, Polis mentioned he will be releasing an executive order to protect against residential and commerical foreclosures, provide flexibility on loans and waive late fees and evictions, which we’re montinoring closely. Construction projects also may be paused or postponed in light of the evolving situation, especially due to potential supply chain delays. Subcontractor manpower already is down 10 to 15% as employees stay home and building departments have shut down their front offices, said Jim Boots, president and CEO of Boots Construction. At the moment, most of the building departments still are reviewing plans remotely and conducting on-site inspections with some special procedures to ensure social distancing. “If they shut down inspections, this would cause construction to slowly grind to a halt,” he said. “This is a day-by-day situation of which safety is everyone’s concern and we need to make decisions in this regard daily.”
For retailer not already shut down, many are changing their hours. Mall real estate investment trusts are down, according to The Real Deal. Simon announced it was closing all of its malls until the end of March, including three in the metro area. The travel industry, especially hotels, will continue to bear the brunt of the immediate reaction, but investors seems optimistic it won’t be too long lasting.
As anxiety builds, no matter the property type, clear communication, transparency and established plans can help fight these fears. As asset managers, it’s an important time to be a leader for your staff as well as your tenants.
