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| Picture @padzzle |
Nothing will be the same. Nothing. Nada.
The ongoing reinvention of retail and commercial real estate expired with COVID-19, as if the commercial real estate was not convoluted enough already with new consumer behavior patterns.
Prior to COVID-19:
· old shopping malls, as well as newer shopping malls, centers, and destinations, struggled putting forth compelling propositions to drive footfall. Why do consumers need to “go to” a shopping mall or neighborhood shopping center when pretty much everything is accessible via a click of a computer mouse or a touch of a smartphone?
· office space was re-inventing itself after WeWork changed the paradigm of office space look, feel, functionality, and use. However, today WeWork is a rapidly sinking ship. Not surprisingly, we will likely see another adjustment of co-working and traditional office spaces as workers better understand their ability to work from home, lower office expenses and increase their business operating profit (margins) – along with the additional benefit of an improved work vs personal life balance.
· talent retention was influenced by the amenities a company offered exceedingly demanding Millennial and Gen Z generations. The message from all big real estate developers focused on creating and marketing “a work, live, play environment” -- a slogan used by nearly all real estate companies around the World.
I wonder…
· What was the value of any commercial real estate property on December 31, 2019?
· What is the value of that same property a mere 91 days later on March 31, 2020?
· How will the value of commercial real estate change following COVID-19?
· How will demand for commercial real estate change following COVID-19?
· How will owners of commercial real estate change and redefine their value proposition to meet the changing demand for their “vital, precious and scarce” offering?
Real estate developers and owners believed and often said:
“Build it and they will come.” To the contrary today, I don’t think so.
“Build it and they will shop.” Again, I don’t think so anymore.
As human beings, let’s focus on our real-time concerns as well as the real opportunities that will arise for real estate companies that understand the new normal after COVID-19.
As we currently live in a world on standby, I don’t think any of us who worked in real estate can go back and market our assets the way we marketed the properties as recently as 60 days ago. Those days are gone. No más. Ciao.
COVID-19 is proving what we somehow knew but didn’t want to speak -- there is SO much we can do from home. Post COVID-19 will lead us to focus on what truly matters.
What will this change in thought process and value proposition mean to any real estate company owning, marketing, or leasing any commercial space? Additionally, how can real estate owners guarantee safe environments? In the end, the value proposition boils down to consumer behavior and by extension human behavior.
Real estate leaders must be progressive thinkers and consider the changes to historical truths and not market real estate as they did prior to COVID-19.
Furthermore, we must no longer rely on the absurdity of influencers and superficial values. All of us will look for authenticity, well-being and real value. What will be the drivers for us to go anywhere - work to leisure?
I will certainly evaluate:
1. Safety: what will be the new protocols and certifications to ensure a location is safe?
2. Value: what will be the real value for me/us going to a specific destination? Must I attend the meeting? Do I really need to buy my clothes in that store?
3. Uniqueness: is my only choice in the world going to this place?
4. Caring: the communication is crafted from real and genuine actions, rather than a message that sounds nice. The future is not about the big online or PR “bang”. It is about people, relationships, small, large, and big businesses.
5. Honesty: Similar to caring, but NOW is the time to be honest about how individuals and companies went through our shared, traumatic times. A real estate company needs to expect honest conversations from their tenants and face the new reality together. Forget about and abandon yesterday’s message and programming about building communities. Now is the the time for honesty from landlord to tenant. Good tenant communication is key and builds a real community.
These same concerns apply to any high-density destination, attraction, hotel, airlines, cruise lines, restaurants, health clubs…. something to write for a future post.
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