How does that saying go? The only certainty is uncertainty…? A sentiment we all associate with right now. ‘Business as usual’ is anything but – and we find ourselves in the strange situation of a ‘temporary normal’. But, while the light at the end of the tunnel may seem far off, enforced social distancing, mass remote working and the virtual shutdown of the UK housing market will eventually come to an end. Of course, the COVID-19 pandemic will have long-lasting effect – and rather than going ‘back to normal’, it’s becoming clear that we’ll all have to get used to a ‘new normal’. So, what might that near-term future look like for residential property managers and estate agents?

A digital-first strategy

It’s 2020. Tomorrow’s world is here today and technology is absolutely embedded in our everyday lives as consumers and professionals. Property managers have traditionally been seen as slow adopters of tech. I’d argue that’s changing, has maybe even changed already – but it won’t be a choice anymore. Businesses that haven’t adopted technology, those that see it as an inconvenient expense rather than a sound investment, will surely be left behind by forward-thinking operators utilising digital solutions to provide a better service and drive greater staff efficiency.

Customer relationship management

Going forward, it’s highly likely that we’ll see some limitations on face-to-face interactions, with encouragement to take appointments and meetings online where possible. There may be further periods of lockdown to prevent spikes in the virus that overwhelm our incredible NHS. And even without these measures, the current crisis will undoubtedly result in an initial natural reduction of in-person social interaction. Agents, operators and managers will have to find ways of attracting and retaining residents through online methods. Virtual viewings will surely become more popular, increased numbers of businesses will adopt digital tools for document storage and exchange, and prospects will expect to quickly and easily interact with companies online.

Self-service is THE service

Even if you can overcome the obstacles to bring new residents into your vacant properties, you’ve still got to find ways of maintaining the high levels of service they expect. The adoption of resident portals has grown significantly in recent years across the private rented sector, student housing, leasehold and the lettings industry. Portals can help maintain clear and consistent lines of communication with your communities, can help to build a sense of togetherness in your developments (the importance of which should not be underestimated right now) and, crucially, allow you to offer residents the option of raising maintenance requests or issues from the comfort and safety of their own home. Enabling online rent payments has many obvious benefits for customers in the context of social distancing, and it means you can potentially maintain a cashflow that might otherwise be restricted. With the right property management solution in place, you can also maintain full visibility and control of your operations if payments are being deferred.

These aren’t trends that have just emerged overnight. The demands and expectations of a tech-savvy generation of renters has been driving this gradual change in residential property management for half a decade or more. It’s now reached a critical mass.

We explored these topics in our recent webinar – Prioritising resident safety: What agents, operators and landlords need to consider in respect of COVID-19. The recorded version is free to download and available here.

A reminder also to existing MRI clients that the products you use can be leveraged for the requirements outlined here. We are here to offer our help, support and guidance as much as we can, so if you have questions or queries then our teams are ready and waiting to help.

MRI Sales & Lettings – a fully featured CRM solution for sales and lettings, with integrated property management and accounting.

MRI Engage – a web-based resident portal with self-service features such as maintenance requests and online payments.

MRI Qube PM – a widely adopted and adaptable property management software, with deep capabilities in block management, PRS and other residential sub sectors.

MRI Property Management X – an enterprise-grade residential suite that provides an end-to-end offer for the evolving UK Build-to-Rent market.

And all of our resources related to COVID-19 are available on our resources hub.

As the COVID-19 situation has unfolded over the past few months, businesses across the real estate industry have been faced with the need to swiftly respond to a rapidly evolving set of circumstances. Given the face-to-face nature of the industry, many organizations struggled to adopt work-from-home policies while still effectively serving their clients, constituents and stakeholders.

Cinnaire is an MRI client that moved quickly to figure out what a “new normal” would look like amidst this crisis. The company planned its response long before much of the country went into lockdown, taking all necessary measures to protect its employees, clients and partners. Their response is an example of how communication, collaboration, and community can help an organization rise to the challenge that faces us all at this time.

An introduction to Cinnaire

Cinnaire is a full-service financial partner that supports affordable housing communities and economic development initiatives through creative loans, investments and best-in-class services. The company has an unwavering belief that all people deserve the opportunities provided by living in healthy communities, and as a part of their work, they match exceptional community investment opportunities with community-focused investors.

As a user of MRI Software’s Investment Central for more than 15 years, Cinnaire has been able to centralize their data and save significant time for fund managers. Boosting operational efficiency while maintaining data integrity has been crucial to Cinnaire’s ability to scale.

Business continuity in the face of change

When the pandemic first started affecting institutions and daily lives across the globe with shutdowns and closures, uncertainty spread fast. As many were trying to figure out what the next day would look like, the executive team at Cinnaire formed action plans to ensure business continuity and to stay focused on raising equity and closing deals. After reaching out to investors and assuring them that they’d be in constant communication, Cinnaire learned that investors were still looking for deals, despite the slowdown caused by the pandemic. The company has begun adjusting its financial expectations for the upcoming year but continues to stay the course.

Responding to adversity with the 3 Cs

In addition to external communications with investors and shareholders, Cinnaire has also taken steps to ensure the safety and continued productivity of their internal staff. Throughout the duration of this situation, Cinnaire has dealt with the challenges using a three-pronged approach.

1. Communication

During the week of March 9, identified by many as the tipping point of the pandemic’s effect on the US, the executive team of Cinnaire made the decision that all staff should prepare to work from home for the foreseeable future. Already equipped with the necessary technology and innovations that would allow their workforce to continue operating remotely, such as video conferencing built into their daily schedules, Cinnaire staff had several days to collect any remaining hardware to perform their duties at maximum capacity in their own homes.

The executive team also began taking the necessary steps to assure staff that even though they would no longer be in one centralized location, they would remain in constant contact about high-level decisions and other strategic communications. In short, Cinnaire made sure that their staff knew they’d be kept in the loop. In practice, these communications came in the form of a long-running and consistently updated Frequently Asked Questions document.

2. Collaboration

The Cinnaire executive team identified six high level questions critical to understanding the current industry environment and drafted a memo to keep staff updated. This was a fluid document that enabled leadership to address concerns surrounding the question, “How do these circumstances affect our goals?” and it was updated on a weekly basis. Instead of simply compiling this FAQ and sending it out to staff once, the executive team instructed each team leader to walk through the FAQ updates with their respective teams and report back with any results or issues.

Essentially, Cinnaire set up a clear chain of communication and feedback across the organization. The executive team would update the FAQ and team leaders would help the members of their teams understand the document and put it into practice in their week-to-week operations. If a team member had a concern or other valuable feedback, that feedback would travel back up the chain, from the team leader to the executive team. The feedback gleaned from the previous week’s updates would then be included in the next update of the FAQ. This clear workflow stream helped put staff at ease and has also helped them understand their place in the current situation.

3. Community

Lastly, Cinnaire has encouraged a sense of community and fellowship outside the confines of industry-related matters. Over the past several weeks, teams have been partaking in virtual happy hours in their own homes, encouraging only “non-work-related” conversation. They’ve also been using Yammer to establish a communal break room of sorts, where the marketing team creates regular challenges for the staff. These activities help keep staff engaged in a time when everyone largely finds themselves in a similar situation – stuck at home, but working to make the best of things.

These are uncertain times for organizations across the real estate industry. However, responding with continued work towards shared goals, communication between team members and leadership, and a resolve that we can get through this will help businesses across the industry overcome the challenges.

The impact the COVID-19 virus is having on the commercial real estate sector is immense. We recently looked at how the pandemic is specifically affecting retail landlords and tenants, as they struggle in the face of self-isolation, social distancing and regional lockdowns.

In this, the second installment in this two-part series, we look at how the sudden change in work patterns is affecting the use of office space and the impact that will have on corporate property owners, operators and occupiers going forward. The blog examines what they need to understand to more effectively deal with the fallout from the worst global health crisis we have seen in the modern age.

New modes of working

Social distancing and remote working are being encouraged by businesses around the world, and for many it has become corporate policy. However, there are still a number of companies where remote working isn’t possible, for a variety of reasons, and the short-term action occupiers or landlords – whomever is responsible – need to take is making sure the regularity and intensity of office cleaning is increased and ensuring there are a number of sanitizing stations available to workers. Additionally, if any workers or visitors infected with coronavirus have been in the building then offices need to be closed down in order for a deep clean to take place.

For the companies where staff are working remotely, the current situation is likely already prompting them to rethink office space in the long run, questioning how they have previously utilized and occupied office space. Many modern offices are now open plan to help boost collaboration and encourage workers to socialize more, but it’s a double-edged sword because it means employees who are working closely together are more likely to transmit viruses between one another.

Assessing the new future for the workspace

As long as the COVID-19 crisis is having its current impact, the use of space and proximity of workers will have to be assessed and addressed in offices and other workplaces where people are still required to come in. Using data and technology to do this in the quickest, most accurate, effective way will be critical to organizations that need to move fast. On the facilities management side, having the technology to register and track which visitors are in a building when and for how long may also be critical to managing the number of people at a particular site at any one time and tracing any contact if that were to become necessary.

In the near term, landlords need to be prepared for tenants looking to break leases early, seek reduced rents or longer payments as the ongoing impact of coronavirus becomes clear. Many businesses are facing the possibility of having to reduce their workforces during the crisis, so landlords should look to work with these tenants to find alternative solutions that bridge the gap during the crisis.

Looking further forward, we are likely to see increased demand for things that will make open plan office environments healthier, like fans, filters, and dehumidifiers – and spaces that ensure people have enough social distance even in better times. We are also likely to see the trend toward working from home become a stronger consideration in workspace planning, as companies choose to provide more flexibility in this area on a longer-term basis. This may require greater flexibility within offices and other workspaces – and in the leases that occupiers seek moving forward.

Working together to ensure the future of commercial real estate

The COVID-19 pandemic is presenting the commercial real estate industry with unprecedented challenges and the best way to overcome them is to put in place plans for a worst-case scenario and hope it doesn’t come to that. Another key will be using the right technology to regularly create clear and consistent updates for investors, partners, employees and other stakeholders, which will help ensure their cooperation as businesses adapt to the rapidly changing conditions they are facing and prepare for a less turbulent future.

To come out on the other side of the coronavirus crisis as strong as or stronger than ever, landlords and property managers – whether dealing with retail properties or offices – need to work closely with tenants to find creative solutions; leveraging technology to understand your business situation in terms of leases and assets will be critical. The industry was already starting to recognize the importance of this type of collaboration, and the drive to survive the COVID-19 crisis might just push cooperation to a whole new level – and that can only be a good thing at the moment.

COVID-19 is dominating the news agenda, and while the immediate effects are clear, the long-term impact is still very much an unknown – and that’s giving everyone in the commercial real estate industry reason to consider both the near- and long-term future.

While under the current circumstance it’s difficult to predict what the commercial real estate market will be like next week, never mind in six months’ time, there are steps investors, owners and corporate occupiers can take to prepare for likely eventualities. With the right planning and technology support they can help protect themselves and, just as vitally, their industry from some of the impact from this rapidly evolving health crisis.

In this, the first of two-part series looking at the impact of the coronavirus, we look at how the uncertainty caused by the pandemic is affecting a retail sector already in crisis – and what retail landlords and occupiers need to keep in mind as they navigate the accompanying business challenges.

The surge in home shopping

It’s no secret that retailers in shopping malls and main street alike have been facing intense pressure in recent years. Online only retailers, like Amazon, have leveraged the ease and convenience of technology to empower consumers to browse and purchase goods without having to leave their house. Already we are seeing ramping up to meet new home shopping demand spurred by the crisis, with the company hiring thousands in markets such as the UK and up to 100,000 in the US.

Coronavirus, which has spread across the world at unprecedented speed, is an additional challenge that retailers do not need. The need for “social distancing” and in some cases “self-isolation” is not only reinforcing shop-at-home habits but is spurring some people who’ve so far resisted online buying to try it – if only out of caution. What’s more, major brands such as Apple, Calvin Klein, Nike and Zara have closed stores worldwide temporarily.

The immediate impact of this is a significant loss of revenues, which in the longer term could lead to some staff being laid off and some physical stores being closed permanently, leaving more empty shop space. These are also popular brands that draw consumers to shopping malls and busy commercial centers in towns and cities, so those retailers that don’t close may suffer even more when popular neighbors close shop.

Taking action to reinforce retail on the ground

For now, retail occupiers will need to take stock of their situations – part of which will be assessing their leases to understand their options and restrictions. Are there clauses for breaks or rent holidays or tying rents to turnover they might need to be aware of and leverage? They may also need to take a deeper dive into their data to assess where they can manage with fewer staff, where they might close stores temporarily for now and where they might want to focus efforts when we eventually come out of the current crisis.

And for their part, what can landlords do? Those that want to keep their tenants in place will need to work with retailers to come up with creative solutions that will allow tenants to maintain operations and survive the current crisis. Landlord also have to understand their own property and lease portfolios and be aware of which clauses tenants might invoke and what they as owners and operators need to do to ensure they comply with all their obligations.

Flexibility on the landlord’s side may be crucial, as retailers will likely be looking for lower rents and longer payment periods to help offset the long-term effects of coronavirus. However, landlords could negotiate arrangements that allow them to recoup some lost rent when the economy rebounds — this can be through an agreement to peg rent to a percentage of revenue or a profit-based approach.

No matter what retail property owners, operators and occupiers do on their own, the situation is likely to require unprecedented cooperation between all parties to ensure a they recover to see a brighter future – as all sides want to see their sites survive and eventually thrive again. Working together to ensure this is really the only way forward at this point.

Change comes slowly, almost imperceptibly, until it doesn’t.

Now, in the midst of the COVID-19 pandemic, is a moment when substantial change has been thrust upon us, without much warning, without much preparation, and so broadly that it is not hyperbolic to say that it is happening on a global scale.

The changes that many of us are adapting to are driven by social distancing practices, stay-at-home decrees and shelter-in-place orders:

• Business: only essential business and employees are working in normal locations with others either working from home or out of work.
• Healthcare: hospitals are eliminating elective procedures and driving more routine visits to tele-medicine.
• Retail: essential brick-and-mortar retail remains, non-essential retail has closed, and online sales are skyrocketing.
• Dining: restaurants have shifted to delivery and take-out or have closed.
• Entertainment: movies whose theatrical runs were cut short were released for streaming while still “in theaters,” and all other live entertainment, including the lights on Broadway, are currently suspended. Some artists have live streamed events to fans.
• Sports: NASCAR held a virtual race driven by actual drivers while all other live events have been suspended, delayed or cancelled, including the 2020 Summer Olympics.
• Education: K-12 schools are closed, having moved online along with most colleges and universities.

Be thankful that it is 2020 and that we are able to move many things online so quickly.

The networking technology of the internet was invented in the early 1980s, the World Wide Web construct came in 1990, Netscape in 1994 and Internet Explorer in 1995. In the early 1990s, we were all using dial-up connections at speeds of 9.6 kbps. By 2000, broadband was emerging, at 244 kbps, a 25x increase in bandwidth. By 2010, we had 10 Mbps in bandwidth, a 40x improvement. And today, in 2020, broadband services are commonly available at speeds of 400Mbps (another 40x improvement) with Google Fiber delivering 1000Mbps (100x over 2010).

In 30 years, bandwidth has increased by at least 40,000x and, while noticeable, it was not an event – it was a gradual change over time. And because of this relatively slow change, we can now leverage greater bandwidth to enable the forced and rapid change in our collective behaviors.

The various applications of technology that we are suddenly using were not just invented. Instead, we have been slowly adopting them on our own terms, as our budgets would allow and where markets demanded. Now, suddenly, we are all in the deep end together, figuring it out and making it work, accelerating adoption.

As a result of this forced change, of the sudden movement of our collective cheese, we are getting over the fear of change. We’re having to adapt quickly, and as we do, some of the changes we now make under duress will stay with us and they will impact commercial real estate.

Business and Healthcare

A substantial part of the non-essential workforce has been working from home, full-time, for a week or more, including those in G&A functions, financial services, software and other knowledge worker parts of the economy. No doubt you’ve seen the screen captures of group meetings that look like a digital Brady Bunch reunion. If you think about it, it is quite amazing that so many people have been able to transition to telecommuting so quickly. Because it has gone well, it may have substantial impacts in the future. Considerations include:

• Will enterprises, bullish on newfound success with telecommuting, begin to reduce needed office space?
• Will apartment demand change, requiring more dedicated work-from-home spaces and better sound proofing?
• Will the urban migration of the millennials shift back to the suburbs so they can live with less expense and be closer to family? This would reshape supply and demand for apartments and also impact the broad array of retail, dining and other service establishments.
• Will enterprises further leverage digital collaboration in place of physical meetings and conferences, taking back travel time to be more productive? Clearly, the hospitality and travel sectors would feel continued impact.
• Will our healthcare “supply chain” be reworked, changing the location and focus of facilities and requiring re-working of facilities?

As an aside, a reduction in people commuting will have a direct and positive impact on the environment, will drive demand for oil lower, resulting in better quality of life by transitioning the daily commute into more home time.

Retail, Dining, Entertainment and Sports

Since Amazon was founded in 1994, there has been great upheaval in retail. Big box retailers have had to adapt or die. Stalwarts, like Sears and K-Mart, cling to life. As retailers have changed, so have the operators of retail centers and malls. There has been a concerted shift away from simply shops and a food court (the quintessential 80’s mall) to a mix of goods and services inclusive of entertainment and a wide array of dining venues.

The diversification of retail was the right move for owners and operators to evolve. Unfortunately, there are few sectors immune from the current state of things, and retail, dining and entertainment are greatly impacted.

Live entertainment and sporting events are a critical cultural component globally, and many retailers, especially restaurants and bars, are in close proximity to theaters, stadiums, arenas and other facilities.

What might their future hold:

• Will “stay at home” directives lead to more home cooking, and a reduction in overall dining out volume? Also, does this spell an end for Blue Apron and other meal prep services? Will apartments need more well-equipped kitchens to differentiate?
• Will drive through and carry out become a new habit? Will some restaurants move to take out or delivery only, limiting their space requirements to only kitchens and pick-up windows? Will landlords scramble to better enable drive through and pick-up for their tenants and customers?
• Will live streaming of events, potentially in a pay-per-view format, find a place in entertainment, leaving venues more vacant and decreasing event venue traffic?
• Will production companies increase simultaneous releases of feature films for streaming and in theaters? Will theaters have to do more than provide popcorn to differentiate?
• Will virtual physical fitness devices and classes accelerate their take of market share from traditional gyms and studios?

Education

Another amazingly fast transition has been the shift from classroom-based learning to online learning. The good news is that the generation of children of current school age have been born with a device in their hands. Notionally, they have been training for this their whole life. Plus, as we know, kids are resilient. Even with success, however, it is unlikely that kids don’t go back to school, as parents’ work schedules are reliant on the K-12 infrastructure as a form of childcare in addition to foundational educational advancement.

College students, also sent home to complete the semester, pose a different situation if they find success in remote learning, raising the following questions:

• Will colleges and universities increase their use of remote learning, especially for foundational classes, keeping control of the curriculum, and their brand, while increasing access at discounted rates?
• Will college students and parents, faced with increasing costs and mounting debt, seek higher quality/lower cost educational alternatives, shunning junior colleges, for remote programs from brand name institutions?
• What kind of impact will a change in delivery of higher education have on student housing operators as well as the other cottage industries that rely on the seasonal influx of population to college campuses?

Technology is the unheralded hero of the moment. We have quickly adapted to a rapid change in our day-to-day life and we are dependent on digital connectivity to maintain a sense of personal engagement and productivity. What is yet to be seen is the degree to which our new behaviors will remain after things return to a recognizably new normal, and how that new normal will drive change in real estate.