Managing the dynamics of mixed-use amid the challenges of COVID-19 requires unique skills that blur the lines between residential and commercial property management.
By Peter Jakel
Mixed-use properties are nothing new to the rental housing industry. Many developments have been moving in that direction for decades in response to sustainability needs and changing resident preferences.
Simply put, people want to live where they have easy access to retailers, restaurants and workplaces. The pandemic, however, has flipped this reality on its head, as businesses have been shutdown to stop the spread, begging the question: Will mixed-use properties still be the trend after the pandemic is over?
The simple answer, according to the panelists on APTvirtual’s, “Avoiding the Landmines of Mixed-Use Property Management Within a Covid Environment,” is “Yes.” Mixed-use is here to stay even with social distancing and periodic shutdowns, but owners and operators will need to adjust to avoid the potential pitfalls caused by the COVID-19 pandemic.
Building and Occupant Wellness
That starts with building wellness, which translates into occupant wellness, according to Chip Watts, President of the Institute of Real Estate Management (IREM).
“Building wellness has never been more important,” Watts said. “Studies find that the healthier the building, the healthier the occupants are. In fact, many of IREM’s firms set a high bar for air quality and natural lighting, as well as green spaces and other measures proven to impact the well-being of occupants. In the face of the pandemic, the awareness of this impact has been multiplied and many more property managers and owners are upgrading their building operations for a positive impact on tenant and resident well-being, especially in mixed-use properties.”
Among the building upgrades is increased attention on HVAC systems to maximize air filtration and circulation and cleaning protocols to ensure solid surfaces are constantly disinfected. That’s not to mention the repurposing of spaces and implementation of services like package management solutions, according to Jesse Miller, Director of Real Estate and Commercial Property Management at Greystar.
Technology Plays A Critical Role
“One thing we have to do is identify and repurpose areas for better use,” he said. “Strategies such as efficient package management have already been in play, but with COVID, this has become more of a necessity. To give you an example of how much of a necessity it is, [the National Apartment Association] back in May shared a study done by MRI that talked about how physical package handling has dropped by 70 percent amongst a million units that were tracked.”
But package management isn’t the only area where technology can assist in dealing with pandemic challenges for both residents and retail tenants. Self-guided and virtual tours also play a big role. Without them, it would be very difficult to lease in the midst of a shutdown.
“There’s been a hard push for all of us to become YouTube experts to host these going back since March,” Miller said. “Virtual tours like telehealth are here to stay. Stats from Apartments.com conveyed that on property websites that had virtual tours, people stayed on three times longer than those websites that don’t have them. Once the prospect’s ready to visit, what can we do then in terms of offering touchless tours? We don’t want to close off the space obviously. After somebody is sold from seeing everything on the website, they want to be able to touch and see and experience the actual apartment or commercial rental area.”
Resident Retention
Even with these new technologies and repurposing, the truth is that mixed-use communities are struggling with leasing, whether that’s commercial space or an apartment home. That’s why retention is so important, and this is especially true for commercial tenants who might have been impacted by shutdowns because of Covid-19.
“With a lot of regulations in place in which restaurants and other places can’t operate in full capacity, it’s important to be close with those commercial tenants and work with them on these situations,” Miller said. “There are also some new and existing options to help with financial exposure [for apartment residents], such as surety bonds, enhanced renters insurance and flex rent.”
Flex rent is a relatively new offering that empowers residents to create customized rent payment schedules based on personal cash flow and their expenses. It encourages better money management and improves on-time rent payments.
Flex rent epitomizes what owners and operators of mixed-use apartment communities are doing to avoid the pitfalls of the pandemic – being flexible. Flexibility will be the key to success as companies navigate the impact of the pandemic in the coming months.
Peter Jakel is the Vice President of Strategy for LinnellTaylor Marketing.