The COVID-19 pandemic has taken everyone by surprise and has caused myriad problems on multiple levels, but it has also shown us how resilient we are and how fast we are able to adapt to change in order to not just survive, but ensure that we begin thriving again in the long term.
With lifestyles and business models having to change almost overnight, keeping an open mind, staying optimistic and trying to find solutions on the go are key. Like other businesses, real estate-related businesses had to either accelerate the implementation of some tools and techniques or completely give up well-established routines and processes. But the effort invested now might really pay off.
To find out what changes and adjustments could be the most beneficial in the long run, we talked to Meagan McCollum, Chapman Assistant Professor of Finance at the University of Tulsa.In your opinion, what adjustments should real estate-related businesses make to successfully overcome this trying period?
“Most real estate-related businesses are people-focused businesses. Those firms that are able to survive and thrive in these uncertain times will find new and innovative ways to make sure that they keep the “personal touch.” As we all find that many things are able to be safely and efficiently done in a digital format, maintaining open lines of communication with your customers, suppliers, and employees [will be easier].
For example, real estate agencies have made big strides quickly to increase the quality of digital showings and move much of the paperwork around leasing, buying, and selling online. However, without maintaining robust personal connections with their clients, their customers may not see the value in keeping their business with a particular firm in the future.
In the same vein, I believe that flexibility will be key in helping real estate businesses as they face an unknown business environment, at least in the short term. For example, landlords can be proactive in reaching out to tenants and coming to agreements that are mutually beneficial instead of applying a “one size fits all” policy to all tenants. This will be especially important in maintaining good quality tenants after the pandemic-related market conditions subside. For instance, if a lease is coming up for renewal, offering a short-term lease extension at the current or slightly lower rates, it may help you retain a good tenant whose business has been negatively impacted in the short term by COVID-19.
Finally, while economic activity is expected to bounce back after the worst of the virus passes, real estate firms should be trying to think ahead about ways that the market might be more permanently altered in the long term. For example, redevelopment of office space might make sense in the long run if firms continue with remote work or reduced in-person staffing long-term.”