Property managers around the world have spent the past few months scrambling to quickly adapt to the COVID-19 pandemic. How would staff safely interact with properties and tenants, and how would they conduct business while sheltering in place?
In response to the pandemic, property managers reshaped policies and employed technologies in order to safely operate business in the essential housing market. An incredible 71 percent of property managers surveyed by AppFolio said they had ramped up virtual showings, and more than 82 percent said at least some of their staff was working remotely. More than half reported their entire staff was working remotely.
Preparing for a Post-Pandemic World
Now that many markets have reopened and others plan for long-term changes, those initial adjustments transition into preparing for a new normal. Just how will the post-pandemic world look? What health and safety adaptations will be relaxed and which will become permanent? Will masks be a passing fad or a new fashion staple? How much social distancing will remain appropriate, and what traditional courtesies will soon be relegated to history?
Telecommuting was starting to gain acceptance prior to the pandemic, but the shift to remote workplaces saw a huge increase in response to stay-at-home guidelines. According to an IBM Institute of Business Value study of more than 25,000 U.S. adults, 40 percent of respondents said they strongly feel that their employers should continue to provide remote work options after returning to normal operations, while 75 percent indicated they would like to continue to work remotely at least occasionally. More than half of the respondents said they wanted to primarily work from home.
Health concerns will continue to influence other consumer behaviors in the post-pandemic world, as well. Almost 40 percent of those surveyed told IBM they likely will continue to use contactless payment options in the future, and one-third said financial concerns will greatly impact their decisions to make a major purchase such as a vehicle.
“The study provides further evidence that COVID-19 is permanently altering U.S. consumer behavior. There are long term implications of the new consumer behaviors for industries like retail, transportation, and travel. These organizations need to quickly adapt their business models to serve the new consumer behaviors in order to survive and thrive,” said Jesus Mantas, Senior Managing Partner, IBM Services.
Property Management in a Post-Pandemic World
In a forever-changed market, property managers must consider which pandemic responses they plan to continue on a long-term basis. Many of their greatest concerns relate to maintaining revenue in a changed housing market. Of those responding to AppFolio, 27 percent said their post-pandemic focus lies in increasing or stabilizing occupancy, 21 percent were concerned about collecting rent, while 15 percent cited concerns with leasing vacant units.
Not surprisingly, however, is the declining turnover rate in 2020. While more than 47 percent of total rented units were not renewed din 2019, that number fell to 42 percent in April of 2020. Those numbers could be expected to rise sharply once lockdown restrictions and coronavirus concerns are eased.
Of course, some of the traditional tools employed by property managers when leasing units likely will be forever transformed in a post-pandemic housing market. More than half of AppFolio’s respondents said they’d increased their dependency on virtual showings using online resources like Zillow, which saw a 188-percent boost in 3D home tours. According to the 2019 Consumer Housing Trends Report, 26 percent of recent home buyers expressed a preference for 3D housing tours even before coronavirus became a household word.
Property management companies also had been transitioning to more digital processes well before the COVID-19 pandemic. Almost half of those surveyed by AppFolio said they were preparing their businesses for the future by “adopting new technology.”
In the post-pandemic multi-family and commercial property markets, companies will promote social distancing by relying on cloud-based applications for tasks like collecting rent, signing leases and communicating with tenants. Amenities popular in the pre-pandemic market will transition to perks that support a more germ-conscious lifestyle. And while maintenance can’t be conducted in the cloud, online property management software can streamline maintenance processes, boosting efficiency and transparency.
Post-Pandemic Hierarchy of Real Estate Needs
In the post-pandemic world, property managers will need to find ways to efficiently meet the demands of a changed market with an expanding array of real estate technologies. Comfy CEO Andrew Krioukov recently explained how companies will address such post-pandemic challenges by referencing a hierarchy of real estate needs. Based on Maslow’s famous hierarchy of needs, Krioukov’s design uses a pyramid to illustrate “a taxonomy of needs and opportunities in property tech.”
In Krioukov’s hierarchy, the base of the pyramid features core needs that are necessary for any property management company’s success. As the pyramid’s levels rise, they focus on more specialized needs specific to more elite brands.
In a recent piece for Venture Beat, Krioukov described the following three levels of the Hierarchy of Real Estate:
Any real estate company must provide the basics, like power, HVAC and building security. The quality and innovation of these basic needs can range widely among properties. Facing the global impact of COVID-19, building facilities and resources that might help prevent the virus’ spread will become pivotal.
Automated systems that control building features like lighting, fire and HVAC will be valuable commodities in a post-pandemic market. Likewise, automated building controls will apply AI technology to design predictive maintenance and other cost-effective and energy-efficient building control strategies. Cutting-edge technologies like that offered by Motili provide platforms that cut costs and boost efficiencies. In the current environment, tenants will demand advanced security systems that protect them by controlling access and monitoring activity at rental properties.
With social distancing high on Americans’ priorities, making the best use of available space will be key in the post-pandemic real estate market. Property managers will need to balance health- and safety-related special demands with cost-effective utilization of available space.
Office buildings, for example, will likely see a combination of demands for more and less space. Krioukov explained that some companies will require more office space in order to allow employees to work while social distancing, but others will transition employees to remote workplaces and require little physical office space.
Technology will be a key contributor to achieving that delicate post-pandemic balance between providing distance and making the best use of available space. Over-door sensors and camera-based systems can automatically track traffic going in and out of buildings and rooms, ensuring those inside have the necessary space to maintain a safe social distance, while also allowing the maximum use within those safety limits. At the same time, analytics software can recommend precisely how to design a space for safe yet efficient use, ranging from the ideal number and size of meeting rooms in an office building to the arrangement of desks.
It’s no secret that motivated employees are productive employees, and job satisfaction fosters motivation and loyalty. In the post-pandemic market, employee satisfaction will hinge largely on the flexibility to work remotely and the ability to socially distance in an office environment.
A variety of applications such as Comfy are helping companies meet workers’ expectations in a post-pandemic workplace, but the professional world isn’t the only place where satisfaction boosts profits. In the multi-family and commercial real estate markets, resident satisfaction inspires loyalty to a property. Similar applications such as HqO are designed to improve tenant experiences in their buildings.
There’s no question that the COVID-19 pandemic has negatively disrupted the worlds of real estate and property management. While building owners and property managers had to scramble and adapt when the coronavirus began its spread around the world, they now must take the time to prepare for the new normal of a post-pandemic market. Krioukov’s Hierarchy of Real Estate Needs illustrates a variety of opportunities that can be addressed through innovative technologies.