8-28-20

2B — August 28 - September 10, 2020 — Owners, Developers & Managers — M id A tlantic Real Estate Journal

www.marej.com

O wners , D evelopers & M anagers By Livia Zambrano, Withum COVID-19’s long-term effects on the real estate industry A ahead of the curve. New Normal The "new normal" has become the buzz

Drive Y our Corporate Sustainability W hile Saving Money.

or simply new furniture, which assists in the new need to social- distance. Analyzing ways to keep up-to-date with current and prospective tenant needs will help foresee and plan for any future health and safety improvements. • Technological Improve- ments – Improvements in this area will be beneficial for both lessors and lessees. With the increased usage of technology, many real estate companies will be able to manage their businesses and assets more efficiently. Some technology software can assist in analyz- ing industry trends and data. Investments in technological improvements such as prop- erty management software can assist to reduce additional overhead costs and automate some of the day-to-day busi- ness processes. Technological improvements have also shown to improve tenant and landlord relationships and will assist the landlord recognize the needs of their occupants as soon as they become apparent. Tenants will be able to communicate more effectively with their landlords and keep them updated during this time of rapid change. There is one thing we do know about what will be happening within the real estate industry post COVID-19 – real estate companies, both residential and commercial, will be adapt- ing and formulating strategies to keep up with the changing needs of their current and fu- ture occupants. Taking small steps now and considering fu- ture improvements will allow for companies to stay ahead of the curve and continue business during the “new normal”. Livia Zambrano is staff level II accountant at Withum . MAREJ

• Unders tanding the needs of lessees – As the need for social distancing emerged, many lessees have implemented work-from-home strategies, video-conferencing, and inter- reacting digitally with their employees, vendors, and con- sumers. Many companies have realized that they have been able to be productive and con- tinue their businesses through the use of technology. As lessees start to adjust their businesses to the “new normal,” many will be looking to their landlords and reevaluating their current lease agreements to see if they align with their new needs and personal or business goals. Companies may only see the need to modify an existing lease or will see the need to enter into a completely new lease contract. The process of evaluating leases to accommodate current and prospective tenants’ needs will become critical to keeping up with the changing industry. It will also help to mitigate some of the associated risk of in- creased vacancies. The demand for space will continue, but it will be different based on new preferences. • Health and Safety Im- provements – As businesses start to re-open and return to their spaces, they will seek to promote the health and safety of their consumers and employees as one of their main priorities. The need for more open work- spaces for in-office collaboration and multi-purpose living spaces for tenants will emerge. Ac- cording to new research by the IBISWorld on the coronavirus, real estate companies should consider larger floor layouts, improving building facilities such as elevators and HVAC systems for better air quality,

term to sig- nify what the world we cur- rently oper- ate in may look like post- pandemic. A s ma n y states contin- ue to impose

Efficiency. Risk Management. Data Management.

Livia Zambrano

Contact Evolution Energy Partners today at 877-280-4655 or info@evolutionep.com

shelter-in-place and lockdown orders, many entities have con- tinued to deal with the uncer- tainty of the global coronavirus pandemic (COVID-19) impact on their financial reporting and business operations. Companies should continue to remain vigilant with their liquidity and usage of cash in such uncertain times. Many lessees, primarily those in the retail and hotel industries, have seen a decrease in their cash flows and revenues due to state shelter-in-place and lock- down orders. Residential and commercial real estate entities have felt the impact in their cash collections from their oc- cupants. According to the IBIS- World Commercial Real Estate July 2020 US Industry report, the coronavirus pandemic will have a lasting effect on the way real estate companies handle their assets. Companies should consider a more conservative approach due to the uncertain nature of the coronavirus im- pact on the industry by focusing on conserving cash, managing assets and maintaining low debt ratios. While keeping the focus on balance sheet management is essential, real estate companies should also consider what last- ing effects the coronavirus will have on the real estate industry and what steps to take to stay

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