CARW met with leaders from the industry to discuss their perspectives on the industry given COVID-19. Kevin Armstrong with Founders 3 Commercial Services, Dan Rosenfeld with Mid-America Real Estate Wisconsin, LLC, and Jim Young with JLL Wisconsin shared insights on what they are seeing in the industry and with their clients while addressing the opportunities and any similarities to what had been seen in the past. Video is HERE
How has life changed?
- Technology has kept everyone very connected, but the sheer volume of deals has dropped. The ability to transact and prospect has been cut immensely.
- Brokers have taken on more of a role of consultant and advisor.
- Still impossible to forecast.
- The industrial side may be weathering the storm a little more strongly as most are deemed essential.
- Everyone is trying to get a good understanding of where the clients heads are at, but many just don’t know yet.
What is happening in retail?
- Many clients are looking at this as a time for opportunity, but many have put expansions on hold.
- Fast casual food & beverage are looking at this time as an opportunity to continue store development, but the majority of retail will be thinning out.
- Retailers will look at closing poor performing locations and become more efficient as a whole. Previously struggling retailers may be forced into bankruptcy.
What is happening in the office market?
- Not a ton of requests for rent reduction or forgiveness, although Kevin expects to see this rise.
- People are anxious to get back to work, but that the shared workspaces concept may not fare well. He believes we may move back to a model where people get more individual workspace or larger footplates. He also suggested that there may be more dollars considered for cleaning expense within office common areas.
What is happening in industrial?
- Virtual tours are difficult to do for industrial and manufacturing facilities. Most of the business is conducted in person and occupiers still want to physically see the space.
- Jim believes you will likely see an increase in safety precautions used during tours including masks, gloves and touring during off hours to avoid contact with staff in buildings.
How does this compare to other disruptions like 2001 or 2008?
- It doesn’t. It is vastly different, we are forced to stay home right now. Almost more self-imposed.
- Prior to the pandemic, the Milwaukee real estate market was booming. We are NOT oversupplied as compared to other recessions and are therefore in a better position.
- 2007-2008 was created out of recklessness with the credit markets.
- 2007-08 created immediate opportunities through financial debacle. There was an immediate need for brokerage services to create value for distressed assets.
- Spend time learning how to work with special services, receivers etc.
- Take on advisory role to create stronger relationships.
- Don’t let your pipeline slip.
- Don’t take your contacts for granted because you will need them if things falter.
- Take this time as an opportunity to better yourself and understanding of the industry, utilize additional education, coaching classes, improve your business acumen so you are ready to hit the ground running when things return to normal.
- Always think about how you can add value.
- For younger brokers, be prepared for the bumps, you will see a lot of highs and lows but be optimistic, things always get better, stick with it.
- Stay resilient, flexible and realistic.