COVID Strategies

Are you a Co-Living operator that signs master leases or management agreements? Or are you the developer and property owner? Given that, are you also redesigning design plans for more conventional apartments or condos? And has that resulted in increased soft costs (for redesigns), hard costs (more kitchens, cabinetry, countertops, etc. needed), and carrying costs (for redesigns increasing holding timelines, utilities, property taxes, neighbor agreements, financing costs, etc.)? What’s the strategic plan now for the project?

CRE

Analyst 2 in RE - Res

Curious are any of you spending time during your work day on company strategic initiatives in response to long term changes from COVID? Whether that's designing and developing a new product, converting existing assets, creating new uses

Multi here. Honestly, no.

We're trying to use it as a rationale to push back on some retail requirements on projects where retail doesn't make sense, but a lot of that is codified and munis typically don't want to grant variances and exceptions for something like that. 

I'm surprised there haven't been more more strategizing. It seems most are content to treat this period as a cash flow drainage and pretend that things will be back to normal. Office landlords basically just urging tenants to come back, new hotels are still being proposed, retail owners just wishing they owned a grocery site instead, and multifamily condos/apts still being developed with useless amenities. On the other hand, some interesting responsive ideas I have read about include Industrious and Proper Hospitality collaborating for hotel office suites and ghost kitchen operator Zuul Kitchens partnering with Silverstein Properties to offer lunch deliveries at their office buildings. Hospitality owners and operators especially I had hoped they would try to be more creative and leverage the use of partnerships and brand alignments for different uses or promotions/collaborations as they are the most affected during this period of time.

I had hoped that COVID would cut down on the desire for useless lavish clubrooms that will never be used, but that also got me some internal pushback. The best I can do is add other amenities on top of the pointless clubroom. 

I'm also pushing for more dens/home office space in-unit, but that's always more a product of the market. If people can afford to pay for the extra SF, we'll add it. If they can't, we won't. 

I do NYC development and this is exactly what I had hoped for, the cut down of useless amenities such as golf simulator rooms and children play rooms. It was a shock to me that the only thing that changed was the sales and marketing. All of a sudden, the new condo development projects just started pitching "open space" and other descriptive words to their marketing brochures, website, and collateral, as if their common area amenity lounges and terraces were programmed as a direct result of Covid. Personally, I don't think more dens/home office space in-unit would work for high cost markets for affordability reasons as space would cost a premium, but I do think enlarged common area work lounges with private studios would work better as a shared cost amenity.

I’m assuming you mean corporate extended stay residences/suites, aren’t the size of those units already approximate to apartment units? And also, have the property values plummeted so much that your acquisition basis makes it worthwhile for LIHTC?

Are you actually finding deals at a reasonable cost basis? We have been scouring to find extended stay hotels and just keep them as hotels, but honestly I have not seen more than a 5% discount to pre covid levels. Everyone is talking about how hotel values will be slashed and the truth is, this just has not happened.

It may be possible but I believe there are longer trends to think about in multiple asset classes such as work from home/coworking/flexible spaces in the office space, longer recovery periods and integrated working space/extended stay bundle promotions for the hospitality space, and a shift to more digital order fulfillment such as ghost kitchens in the retail space