We have developed this resource as considerations and some best practices for Occupiers as the impacts of COVID-19 continue to escalate. We will be releasing updates as conditions unfold. Additional insights can be found on our microsite. Our global professionals stand ready to help with solutions as your needs evolve over the coming days and weeks.
- Provide recommendation and help for remote workspace: Many employees who do not normally work remotely are now doing just that. Ensuring they are supported is important to ongoing engagement and productivity. Colliers has provided recommendations for improving success of remote work. A study by Stanford University revealed that there are increased levels of productivity resulting from a shift to remote work. The study analyzed those who worked remotely and in traditional settings and concluded that the productivity among home-based workers was equivalent to adding a full day’s work to each week.
- Advice for remote workers on ergonomic/comfortable workspace: Ergonomically designed home offices maximize comfort and productivity. Employees that do not have home offices may need assistance creating a work environment that allows them to work remotely. Furniture, seating position, lighting, noise levels, and internet bandwidth are important considerations. Have a plan to support and supply employees in need.
- Contingency for employees if their home does not support remote work: Some employees may not have an environment to support remote work. This is an evolving concern and one that requires close coordination with the business units and HR, depending on the work being performed. Options to consider include flexible workspace solutions that are close to residential areas.
- Communication plans, up-to-date contact lists and access to information: The International Facilities Management Association (IFMA) has developed the Coronavirus Preparedness Resource Center to assist with facilities and real estate management practices.
REAL ESTATE STRATEGY AND TRANSACTION ADVISORY
- Consider upcoming lease expirations for closure and remote work for the time being: Explore opportunities to work remotely for extended periods of time without negative impact to productivity.
- Opportunities for immediate rent abatement: Some landlords may consider this concession in exchange for an extended/expanded lease commitment.
- “Blend and Extend”: Reduce ongoing rental rate in exchange for and extended/expanded lease commitment.
- Short-term lease renewals, and/or reduce sizes of spaces leased: Landlords may be willing to consider month-to-month or short-term lease renewals/extensions, possibly at a discount as well versus no renewal at all.
- Space tours, when transactions must get done, and space fit-outs: Plan on utilizing video, 3D rendering tools and virtual space tours, such as Colliers’ Office Expert, www.FastOffice.com, and www.matterport.com.
- Third-party logistics providers for supply chain solutions: For supply chain facilities with upcoming lease expirations, consider third-party logistics providers (3PLs) options at least as a stop gap until conditions are more stable. Many 3PLs specialize in integrated operations of warehousing and transportation services that can be scaled to customers’ needs. Some will also work on limited or short-term contracts.
- Investigate your risks with flexible workspaces: Do you have less control and transparency regarding who else is occupying? Flex operators have recently issued direction to their tenants to communicate when their employees have come in contact or are infected. How often is the office being cleaned and how? How about the building in general outside of the flex space? Are there time and people limits for conference rooms, common areas, etc. to minimize exposure? Flex provider business continuity plans (BCP) if the building is shut down? Are there other locations to access if needed?
- Evaluate existing lease agreements regarding force majeure, and rent abatement rights: Consult legal counsel for advice. One of the sources to consider as a reference from one of our trusted global legal partners, Torys, can be found here. Also potentially seek advice from risk management on potential coverage for business interruption insurance.
- Evaluate existing lease agreements for additional variable commitments such as parking spaces, gym memberships, etc. Also request that landlords revise operating expense estimates now instead of waiting to reconcile in early 2021.
- Consider risks to ongoing projects: Assess the status of all projects and the impact of delays or cancellations. Impacts to consider include:
- Schedule delays and occupancy options with landlords and business units served
- Extension provisions with current landlord if relocating to another location
- Business unit critical occupancy dates for production or customer service delivery requirements
- Capital expenditure availability due to status of business unit and enterprise
- Prioritize projects based on business value. Assess bandwidth and ability to maintain business continuity given the priorities.
- Stream-line operations during remote work periods: Assess occupancy requirements and prioritize essential services such as security, hospitality and concierge to maintain business continuity in a minimized operating state. Seek to consolidate mandatory functions within facilities if and where possible.
- CRE Business Continuity Plan: Ensure that your BCP is updated with accurate protocols and asset requirements. Ensure that communication templates are ready for immediate deployment.
- Optimize Inbound Shipment Capacity: Re-evaluate shipment projections and explore opportunities to decrease leased and/or 3PL spaces.
- Stagger shifts for social distancing: Remain current with product shipping stage information and maintain open communication with clients to manage expectations. Introduce staggered employee start/stop times to minimize common/shared space use. Develop guidelines for numbers of employees and time allotments for shared spaces.
Colliers has also created a microsite on COVID-19 insights and recommendations, beginning with the APAC region but is currently being expanded.