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Commercial Real Estate – The Covid Impact

The new office environment :  From being downtown, to work from home, and the transition to a “ new normal “

A very large commercial property firm, Cadillac Fairview Corp.,  is preparing for a “measured” return for people in their office buildings.  With the company having many tenants, including many multi-nationals as well as smaller firms, “It’s going to be a gradual but steady climb back to normalcy,” says Sal Iacono, the Cadillac Fairview EVP of Operations.

As cities ease restrictions on business from the Covid-19 pandemic, office workers should brace for dramatic changes, with numerous precautions to protect them and the public. Cadillac Fairview, which is owned by the Ontario Teachers’ Pension Plan and has numerous properties around the world, is adopting new measures to make returning to work safe.  For example, elevators will have limits of 4 people with thin anti-microbial film over the buttons.  The company also plans to introduce digital apps so people can schedule their elevator rides – instead of waiting in line, Iacono said, “ so that you know with certainty that you’re not going to have to wait a long time in order to be able to access your floor ”.  Further, building occupants will be required to wear non-medical face masks or coverings in elevators and they’ll be “ strongly encouraged ” to wear them in meetings,  common office areas, and public spaces (including restaurants, shopping zones, on public transit, etc.).  The company is also working with tenants on ways to stagger start and end times for employees to avoid crowding.  “ In order to be able to allow the maximum number of people to come into those office buildings, we’re going to have to change our behaviors for a period of time ” Iacono said.

To build trust it’s important the office be a safe environment with the above attributes, plus more spacing between people’s work area, having social distance markings and signage, more services (ie: Contact Tracing and Predictive Cleaning), etc.  While many people haven’t seen this yet due to working from home, it’s all part of the ” new normal”.   This has occurred due to only  5 % to 10 % of people being at the office in the depths of the pandemic shutdown, estimated Iacono.  He saw a first-hand look at how a city core became a ghost town when he went to his office during that time in a large office / shopping complex – “ The mall under normal circumstances has 53 million people a year going through it, to see it empty was a little dystopian,” he said. “ Further, when I took the elevator up to my office, there were only 2 people on the floor ” !

Even with restrictions easing, Iacono doesn’t anticipate a rush back to the office.  Many municipalities have kept schools and daycares closed – which means a slow return for many workers.  In markets that have reopened, Iacono is seeing between 15 % and 30 % of office workers returning at first then increasing over time.  “ I try to dispel the notion that on the first day that the government lifts restrictions in the market that everybody shows up back at the office all at the same time like any normal day pre-Covid ” he said. “ That’s not going to be the case ”.

May 22, 2020       Doug Alexander / CAIL      –     Smart Buildings commentary