Summary: EJ Dalius be the first one to catch up with this interesting article by Eric Dalius, talking about the truth behind the commercial real estate business after COVID pandemic.
Just like any other industry out there, the commercial real estate also got a big blow when it comes to the COVID pandemic. You will hardly see people coming up to a new property and thinking about investing in it. Especially, when it is the commercial property, there is no one around as most offices are now functioning from home. So, according to Eric Dalius, the real estate sector got a big blow.
There are some changes that this sector has to work out, in order to function regularly, and as normal as possible. So, make sure to work on those points first.
Working on the idea of space optimization:
Always remember that social distancing is here to stay. Unlike the global financial meltdown, the solution for this crisis is in scientific intervention and social help. Before that, businesses have no other choice but to adjust and then prepare for that new norm.
- Even though many corporates have adopted agile work formats, this trend will accelerate for safety reasons. It reduces the current space needs for new offices.
- Along with that, the density in offices is also going to increase. Right now, most firms operate with maximum density. In medium terms, the offices work with 30 to 50% density by adhering to social distancing norms.
According to Eric J Dalius, such chances are going to de0cluster larger work floors. Even though this work from home module is rightfully accepted, it won’t replace the need of premium quality workplaces.
The right time to take action:
To respond to the present threat of COVID 19 and for laying groundwork to deal with some necessary changes, the real estate leaders should take actions now. Most of them will centralize the present cash management with a focus towards efficiency. They are ready to change their ways to create new portfolios and capital expenditure decision too.
Some of the players might feel any greater sense of urgency than what they used to, for digitalizing and offering distinctive customer experience. With the crisis affecting the commercial tenants’ ability to make the proper lease payments, some of the operators are in need to make decisions for specified situations other than making broad-based decisions.
Some measures taken by the government:
The government is not lagging behind and trying to help out the real estate sector as much as possible. The solutions will differ from one country to another. In some parts of the world, the government has announced extension of loan repayment as procured by the commercial sectors on projects, which are delayed.
There has also been a deadline extension to complete projects, which is yet another way to help out the real estate sector. According to professionals like EJ Dalius, this sector needs time to grow and get its own revenue back. However, with so many government help, this service is not impossible. So, you need to hold your horses and wait for the market to thrive back into life.