The escalating economic impact of the COVID-19 is being felt far and wide across every industry. And the real estate sector is no exception. In fact, this industry is facing multi-faceted effects based on the region and size and type of the property portfolio. As players worry about maintaining asset value and cash flow they are also faced with unprecedented challenges – complying with new government policies aimed at containing the spread of the virus, ensuring tenants safety, and optimizing sanitization and maintenance.
As the industry continues to experience sweeping changes, they need to focus on and strategize how to adapt to this ‘new normal’ and move ahead to ensure business continuity. Shock and fear are obvious in the wake of the severity of the pandemic. But as we stare into uncertainty the only way to weather this storm is by building strong network and strengthening market position through this crisis.
Moving into uncharted territory
With social distancing norms in place, buying, working, and travelling habits have already been altered, these shifts in consumer habits may be long term, even after the pandemic is over. Such as buying from brick and mortar stores or going to a mall for shopping. Shopping centers and retail stores are already staying away from the premises, however with shifting consumer habits many brands may radically reduce their footprint to manage cash flow challenges after all this is over. This trend translates into rent freeze crisis for commercial real estate owners. And the only way to manage it is to strike a balance between strengthening competitive differentiation and liquidity. This requires making well-informed, insight-based decisions especially when it comes to commercial lease concessions.
Managing the abrupt slowing down of business
In a lot of places/locations where the outbreak is severe, everything has changed almost overnight, with real estate players scrambling to manage and reassure clients, make work-from-home arrangements for employees while ensuring enhanced cleaning and maintenance of the properties. This abrupt and far reaching impact is so severe that even if you have contingency plans, they are falling short in the wake of such sweeping disruption. Property administration and management is a tricky business and you cannot have a blanket approach for tenant and property management under normal circumstances let alone now when everything is in complete disarray. More than ever, now is the time when real estate players need to manage and make use of comprehensive property, consumer, and competitive data to get access to fact-based insights on progress of the outbreak, competitive portfolios, and tenants.
Preparing for a rebound
As every real estate owner continue to prepare for the downturn, they need to consider making decision based on the context and situation while accounting for tenants’ safety and well-being. What is imperative is to have access to accurate data related to lease renewals, current price point, tenant-default probability, building appearance and value because of vacant spaces, new regulations, and probable reputational risks. Such information can help make targeted and focused decisions, which is critical considering commercial real estate has a very key role to play in helping other businesses navigate the crisis.
But very few real estate players have access to such up-to-date and accurate information and governance tools and process to manage data. Partnering with a specialized service provider is the need of the hour who can provide reliable and continued support enabling you to make right and bold decisions while ensuring deeper engagement with every stakeholder.