A Forced Pause in Everyday Life May Lead to a More Introspective Future
by Levi Kelman, CEO, Blue Onyx Companies
With the spread of COVID-19 and the resulting global shutdown, an opportunity to take a brief pause on life as we all know it and spend time taking stock arises. This pandemic is not an isolated issue, for certain folks this is a global humanitarian issue of immense proportions. Each of us has the opportunity to think about how we can all together make this world a better place going forward.
The pandemic and its subsequent disruptions will force all of us to evaluate certain fundamental considerations about everyday life, specifically regarding commuting and work, which are being raised as people are required to pause from their regular routines and adapt in the present to the lock-down.
In the short term, many people and companies have proven their ability to work productively remotely and going forward we will need to consider and evaluate the benefits of traditional office environments.
For businesses, the “new normal” after restrictions are partially lifted will likely require significant changes to many companies’ existing office environments. These changes will be driven by a combination of possible future regulatory guidelines and by employee’s concerns about hygiene and health. We’ll likely see a demand for less people in close proximity, barriers between employees and outside people, and more restricts to keep employees safe while isolating them from direct contact with outside people. This will also possibly lead to greater flexibility and allowances for more remote working. In short, the footprint that companies require in commercial buildings will need to adjust.
On the housing side of the real estate world, those suffering from income instability or that need to look at lower overall cost of living, will potentially need to move out of denser urban areas to more affordable, and less congested, real estate markets. People making such choices to live in less dense urban areas will drive businesses to consider real estate in those markets for satellite offices and to consider shared/flex work space models that they never would have considered previously.
But it’s just these types of situations that reinforces the strategy that Blue Onyx has been pursuing for its projects; finding unrealized opportunities in under-developed secondary and tertiary real estate markets. This allows for housing that’s still within a commutable distance to major metropolitan areas but with greater affordability and lower development costs. This gives the opportunity to innovate and adapt much more quickly than in traditionally high cost and more rigid real estate markets, which means lowered risk.
The potential trend of continuing decentralization of companies and moves to smaller, distributed offices, is where we see the growing need for innovative mixed-use developments. Projects that combine retail, office, and living spaces with shared outdoor spaces create new community hubs that let people who do need to work in an office avoid long commutes but want to maintain a walkable lifestyle. This last line doesn’t flow properly.
One particular city that may be poised to benefit from these shifting demands is Paterson, New Jersey, a city rich in history but suffering from decades of decay and under-development. Recent efforts to revitalize parts of the city represent a prescient move to bolster a very commuter and family-friendly city in what is still a very affordable market in close proximity to New York City. This hidden gem, with the country’s 2nd largest waterfall and a beautiful National Historic Park, is now becoming an optimal yet affordable choice for those looking to still be within reasonable commuting distance to major metro areas.
The only thing we do know right now is that economic impact will be sustained, and the time to recovery is uncertain, but re-evaluating decisions on working and living will quickly be top-of-mind for everyone impacted, and the ultimate impact on Commercial Real Estate in particular will be the hardest to predict.