The Impacts of Covid-19 on Real Estate Design & Development

05 May 2020

As we look ahead to reopening the economy, there are inevitably going to be changes to the way we develop, build and utilize spaces in Chicago and beyond. In order to get a better sense of what that might look like, we sat down with two members of Focus’ real estate development team, Courtney Brower and Vic Howell to discuss what they see as the potential impacts.

If we jump ahead to a time where Covid-19 is a thing of the past and we have established our “new normal”, what are some of the biggest differences people should expect to see in their spaces, office, apartments, etc…?

Vic Howell: There will certainly be a need for more personal space in every facet of our lives and to support that, there could be generally larger public and private spaces across the board. New technologies like touchless features were already trending within certain types of real estate and I expect technologies focused on improving public health practices to become more prevalent in the common dialogue between landlords and tenants. Sustainable design and indoor air quality will benefit as people are more mindful of how mechanical systems impact wellness.

Courtney Brower: Specific real estate sectors may see more change than others. For instance, the open office model will likely have to be adjusted. I think we will see a decline in bench style office seating as tenants opt to maintain six feet of distance from employee to employee. There is also the potential for employees to demand more private office space. Another example is the multifamily sub-concept of co-living. Mandatory shelter in place orders have highlighted the importance of having a safe, private space which may make renters think twice about the co-living model. Renters are going to desire generally larger units that have space for a home office and private balconies as the need for “private” outdoor space has arisen.

In the near term, as we start to slowly introduce more interpersonal contact in our environments, what sort of quick adjustments do you think will be required? What should owners and landlords expect the cost burden to look like?

Courtney Brower: In the short term, owners and landlords should expect to spend money on reconfiguring their offices, amenities, and common spaces in order to allow tenants to maintain social distancing. They may have to supply PPE and increase cleaning in high traffic areas like lobbies and shared amenities.

Vic Howell: Additionally, buildings will need to strategize how to best reduce the number of people in shared spaces using the technology they have already in place. For instance, retail spaces could take steps to install transparent barriers at point-of-sale stations to help protect customers and employees. Businesses will have to develop virtual interactions for the common in-person transactional activities like shopping, dining and entertainment. For instance, ordering in a restaurant online or using a mobile app. This may become a long-term solution for many functions as we find what processes are made more efficient.

Aside from adding more space between workstations and reducing the number of shared amenities in apartments, what sorts of innovative technologies do you think could be useful in making shared spaces safer and healthier?

Vic Howell: Anything that limits or eliminates the need for touching surfaces. Reduced contamination opportunities will improve the comfort level of the users. These technologies are already available in many cases but could be expanded. For instance, in multi-story buildings with elevators, destination dispatch systems could be useful in reducing the number of people sharing small spaces. Smarter package delivery systems to reduce the number of hands involved in delivery mail and packages will increase safety and support the constant increase in online shopping.

How do you think Covid-19 will affect the big amenity models we have seen in luxury rental markets in Chicago and other cities?

Courtney Brower: Renters will still expect big amenity packages, but they will look different. I think we will see more buildings that offer strong hi-speed internet packages to support an increased need to work from home. We will see more investment into outdoor amenities so that tenants can safely enjoy the needed time outside while maintaining their social distance.

For owners and landlords who are looking ahead to developing new buildings, what should they account for that they wouldn’t have pre-pandemic?

Courtney Brower: I think we will see owners paying more attention to the ventilation systems within spaces. Tenants will have questions about mechanical systems and if they mix air from space to space or floor to floor. Landlords may have to provide compartmentalized systems that do not mix air from one tenant space to another. Take our development project at 167 N. Green Street for example, the innovative VRF HVAC system utilizes state of the art technology to provide operators with increased control of the interior climate while reducing the amount of shared air between units. This increases tenant comfort while taking up less space than a traditional AHU HVAC system.

Vic Howell: The size of residential units and office spaces could be impacted as well but there will likely still be people comfortable with smaller areas in the long term. In the short term, touchless features and surfaces that are easier to clean could be bigger selling points for tenants.

Without a crystal ball, it is hard to say exactly how Chicago will change but those who can adjust quickly to incorporate new technologies and practices to support a world with more social distance will have a strategic advantage. To learn more about how Focus will adjust its practices please subscribe below.

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