Creating A New Normal

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By Audrey Navarro

All, I wanted to share an update with you this week that is more geared around what is the path to getting back to a new normal, and what your clients may be faced with along the way.

  1. Morgan Stanley put out a great chart (attached) that outlines a prediction on recovery timing. I thought this was extremely insightful.

  2. Many industries will continue to be impacted until/unless a vaccine or treatment is available to the masses. I have also attached a Yardi report on jobs related to many cities across the US in some of these sectors. These industries may include:

    • Travel - especially large conferences and resorts that cater to large groups

    • Large events (over 50 people). Weddings, Concerts, Entertainment, Festivals, Sporting Events, etc.

    • Retail - now that we have all learned at lightning speed how easy it is to make online purchases, retail will likely continue to suffer in many ways.

    • Industries supporting travel, events, and retail will also be affected. These include advertising, restaurants in heavy travel markets, arenas and spectator sports, airlines, etc.

  3. Many industries will expand, create opportunities, and reinvent themselves:

    • Grocery Stores! including long term delivery options.

    • Industrial / Manufacturing. Note that I heard from one of our Senior Leaders in KC that they are BUSIER THAN EVER TODAY with HQ and regional facility RFPs for national corporations in the areas of warehousing, distribution, manufacturing and related offices. This includes corporations that are manufacturing PPE and medical equipment, as well as Tesla who announced a focus on midwest expansion for their new product line. KC is well poised for distribution and recruiting talent away from the coasts.

    • Boutique Hotels, AirBnb, and Localized travel opportunities where you can avoid crowds but GET AWAY from your home :) Small intimate experiences will become more relevant than ever.

    • Sanitation Consulting & Screening companies that help navigate and enforce limitations - including limiting traffic in large establishments, deploying new protocols for larger organizations on how to implement healthy habits at work, and potentially taking temperatures upon entry. Also - deploying and enforcing any interim credentials that are required.

    • Tutoring/Academic Achievement - in person as well as online resources to keep kids occupied through what could be a longer than normal summer (some project schools will not reconvene until Mid Sept)

    • Construction - In most of the major economic crisis in our country's history, we have partially focused recovery around putting people to work through construction and economic development building projects. By early to mid summer, I think this will surface. Renovation to repurpose obsolete real estate, civil infrastructure, and new development could all be applicable.

  4. Technology & IT will be front and center as companies reinvent their "normal". Many companies that have suffered have made major changes to their business models, and this requires innovation and technology. PWC, one of the largest international accounting and consulting companies made their employee Digital Fitness App available to EVERYONE through July. It is a great way for companies and individuals to enhance their digital game knowing that it is going to be changing an increasing pace. For info here is the link to download  PWC Digital Fitness App LRNALL is the invite code. It includes a quick assessment of your digital fitness, and then provides programming (videos, articles, and industry ideas) to increase your aptitude in bite size 2-10 min increments.

  5. WHATS NEXT FOR Property Owners?

    • They need help in the short term managing expenses (especially commercial property owners). How can we assist them on the management front?

    • They need help with their commercial leasing (especially if they have retail businesses that may not survive). What businesses can we identify to fill in some of these vacancies long term?

    • They may want to SELL and need advice about how to best position their property for sale.

    • They may be looking to identify BETTER opportunities than they have been able to find in recent months/years. Where are those opportunities?

    • They may be looking to pivot to a new/different asset class (i.e. Retail to Industrial, Multi-Family to Commercial, Stabilized to Value Add, etc.) They will need ADVICE in order to accomplish this.

  6. WHATS NEXT FOR Tenants/Occupants?

    1. Best Economic Climate to START a non-Covid Affected Business EVER. The rental rates, and discounting will be very attractive.

    2. Best Economic Climate to PURCHASE a building if your business is thriving. Low interest rates are a major advantage, alongside higher than normal vacancy that sellers are facing. 

    3. Best opportunity to find turn-key vacant spaces in hard to find segments such as: Restaurants, Automotive Repair, etc.

Hope this is helpful, and have a GREAT WEEK!

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