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Message From ULI SF District Council Chair
We are all in this together. There has probably never been a time when this was more true for our ULI SF District Council members.
From Our Members: Observations & Opportunities
April 17, 2020
Join us every other week as ULI San Francisco leaders and members share their experiences and perspectives in this ever-changing world. Their views represent various real estate industry segments and delve into both professional and personal thoughts and ideas in this snapshot in time, and what positive opportunities can be found today, and in the future.
Meet this week’s contributors:
Jeff Smith
President and CEO, Sack Properties
Observations
As this crisis started, our thoughts were for the safety and health of our team members, our residents, and their families. Paul Wong once said, “A person’s true character is often revealed in times of crisis or temptation.” I really reflected a lot on this quote during the first weeks of this crisis. I have never been prouder of our Sack Properties team and how they immediately responded, communicated and led our teams and communities. Our first actions were implementing policies and procedures across our portfolio to keep our teams, residents and communities safe. This included more frequent cleanings, safety equipment for all team members, adjustments to responding to resident service requests, and working with our vendors to see who is still able to respond to emergency repairs.
We are now four weeks into the Great Quarantine. When this all started, I thought we would be returning to work right about now. It is sinking in that all of us will be out for at least another four-to-six weeks before even a portion of our cities start returning to work. I can’t imagine going through this type of crisis 30 years ago without the technologies that we have today. This has reinforced to me how important personal connections are with our teams, peers, friends, and family. Instead of conference calls, we have been holding video calls and virtual happy hours to brainstorm, connect, and to laugh. Being able to see one another’s faces and share our feelings has been very therapeutic. At home, the ability to spend more quality time with my family has been great. Game nights, family meals, and bingeing new shows has brought us closer. My daughter is a few years away from becoming a teenager and I know I will look back on this time together as a gift.
I know there will be a number of new curveballs and challenges that come our way, but the way we have adapted and responded to this crisis has given us the experience to persevere to the new trials ahead.
Opportunities
The arc of this crisis will likely be more predictable than that of other types of macroeconomic shocks; pandemics have beginnings, middles and ends, and as more data emerges, mathematical models become increasingly accurate in predicting the episode’s likely scope and duration. This should give consumers, businesses, and financial markets more confidence that the world will return to “normal” within a discernible time period. Most other types of crises don’t afford us this type of foreknowledge.I believe we will look back at these times and realize how much technology and creativity lead to a better way of conducting our business. At the beginning of this year, our firm had just started testing out new technologies around how prospective residents tour our communities. We started with several communities conducting self-guided and virtual tours. As this crisis ramped up, we were able to implement these new technologies across our portfolio in a short amount of time.In times of crisis, relationships matter. The deep personal and professional relationships that I have developed over my career as a part of ULI has been invaluable. I have been able to reach out to peers and friends and discuss how each of us are adapting to the challenges of the day. I miss our ULI SF community and look forward to seeing you all soon.
The arc of this crisis will likely be more predictable than that of other types of macroeconomic shocks; pandemics have beginnings, middles and ends, and as more data emerges, mathematical models become increasingly accurate in predicting the episode’s likely scope and duration. This should give consumers, businesses, and financial markets more confidence that the world will return to “normal” within a discernible time period. Most other types of crises don’t afford us this type of foreknowledge.I believe we will look back at these times and realize how much technology and creativity lead to a better way of conducting our business. At the beginning of this year, our firm had just started testing out new technologies around how prospective residents tour our communities. We started with several communities conducting self-guided and virtual tours. As this crisis ramped up, we were able to implement these new technologies across our portfolio in a short amount of time.In times of crisis, relationships matter. The deep personal and professional relationships that I have developed over my career as a part of ULI has been invaluable. I have been able to reach out to peers and friends and discuss how each of us are adapting to the challenges of the day. I miss our ULI SF community and look forward to seeing you all soon.
Kelly Kline
Chief Economic Development and Land Use Officer, Mayor Sam Liccardo’s Office
Observations
Last week I picked up a few things from city hall — my first visit in almost a month. It was one of those “time capsule” experiences. A half-finished mug of tea sat by my desk along with piles of paper representing items that were incredibly important just a few weeks ago. Now, not so much. While our post-COVID world seems frozen in time, cities have been moving mountains to help residents and businesses.In the first days it was a race to understand the stay-at-home order (what businesses are essential?) and then amplifying messaging to keep people home — including touting the restaurants providing curbside or delivery services. Almost half of our downtown eateries made this pivot.New polices that would typically take months, were implemented in days — enhancing sick leave requirements so essential workers could stay home if sick, creating local moratoriums on residential and commercial evictions, and reallocating funds to create bridge housing for our homeless population.Within the first week of the crisis, Mayor Liccardo launched “SiliconValleyStrong” to provide financial assistance to our most vulnerable residents and businesses, and to connect willing volunteers with food delivery efforts. This week, donations are expected to reach $20 million dollars.
Last week I picked up a few things from city hall — my first visit in almost a month. It was one of those “time capsule” experiences. A half-finished mug of tea sat by my desk along with piles of paper representing items that were incredibly important just a few weeks ago. Now, not so much. While our post-COVID world seems frozen in time, cities have been moving mountains to help residents and businesses.In the first days it was a race to understand the stay-at-home order (what businesses are essential?) and then amplifying messaging to keep people home — including touting the restaurants providing curbside or delivery services. Almost half of our downtown eateries made this pivot.New polices that would typically take months, were implemented in days — enhancing sick leave requirements so essential workers could stay home if sick, creating local moratoriums on residential and commercial evictions, and reallocating funds to create bridge housing for our homeless population.Within the first week of the crisis, Mayor Liccardo launched “SiliconValleyStrong” to provide financial assistance to our most vulnerable residents and businesses, and to connect willing volunteers with food delivery efforts. This week, donations are expected to reach $20 million dollars.
Opportunities
To quote the City’s Emergency Operations center, we are now moving from phase 1 (saving lives) to phase 2 (saving livelihoods). Economic recovery is top of mind, and we will be harnessing the incredible brain power of this valley to ensure that that we tackle it with the same tenacity we applied to flattening the curve. I firmly believe this crisis will ultimately make our region stronger. Already, opportunities are emerging. A few examples:Embracing Technology: In the spirit of “let no crisis go to waste” let’s celebrate that cities like San Jose are accelerating their move to on-line permitting, allowing for electronic plan submittal and review. Hooray! And in the same vein, as K-12 classrooms go on-line, our “Digital Inclusion” challenges have become more urgent. Eliminating this historic divide is critical, and San Jose’s Digital Inclusion Partnership provides an excellent roadmap of how to accomplish this goal.Leaning into Urbanism: I suspect that anyone with a ULI membership is laying awake at night trying to figure out what COVID-19 means to urbanism. As urbanists, we will need to explain that density was not culprit in this crisis. Case in point is Singapore which is incredibly dense, and remarkably, virus-free. What future public events look like remains to be seen, but we do know that many urbanists principals have prevailed, especially the value and necessity of public space which is made possible by density.Cross-sector Collaboration: Finally, cross-sector collaboration has always been a fundamental value of ULI members and I’m heartened to see this happening organically. Whether it’s multinational companies using global supply chain connections to procure PPE, or companies partnering together to make new products like ventilators — our P3 definition may evolve to reflect a new level cooperation.
To quote the City’s Emergency Operations center, we are now moving from phase 1 (saving lives) to phase 2 (saving livelihoods). Economic recovery is top of mind, and we will be harnessing the incredible brain power of this valley to ensure that that we tackle it with the same tenacity we applied to flattening the curve. I firmly believe this crisis will ultimately make our region stronger. Already, opportunities are emerging. A few examples:Embracing Technology: In the spirit of “let no crisis go to waste” let’s celebrate that cities like San Jose are accelerating their move to on-line permitting, allowing for electronic plan submittal and review. Hooray! And in the same vein, as K-12 classrooms go on-line, our “Digital Inclusion” challenges have become more urgent. Eliminating this historic divide is critical, and San Jose’s Digital Inclusion Partnership provides an excellent roadmap of how to accomplish this goal.Leaning into Urbanism: I suspect that anyone with a ULI membership is laying awake at night trying to figure out what COVID-19 means to urbanism. As urbanists, we will need to explain that density was not culprit in this crisis. Case in point is Singapore which is incredibly dense, and remarkably, virus-free. What future public events look like remains to be seen, but we do know that many urbanists principals have prevailed, especially the value and necessity of public space which is made possible by density.Cross-sector Collaboration: Finally, cross-sector collaboration has always been a fundamental value of ULI members and I’m heartened to see this happening organically. Whether it’s multinational companies using global supply chain connections to procure PPE, or companies partnering together to make new products like ventilators — our P3 definition may evolve to reflect a new level cooperation.
Mona Lovgreen
Associate, DIALOG
Observations
As part of a multinational organization, working virtually and remotely has been a common practice for me at DIALOG, given that our teams and clients are spread across the US and Canada. What was a major shift through the shelter-in-place ordinance was the inability to meet with the local real estate community or meet new contacts; no more coffee meetings, power lunches, committee sessions, or networking events. Fortunately, after the initial shock was over, the industry has resumed almost all of its events and activities; our committees started meeting again, the panel discussions and lectures were hosted again, even real estate happy hours took a new form, of course all virtually. And through it all, it feels that our reach has broadened, and with it, our industry has become closer.
Design in the era of shelter-in-place has been interesting. We are currently designing the US Headquarter for a European company. Prior to the lockdown, we were already conducting most of our presentations via videoconferencing, since our client team is based in Madrid. After the lockdown, the only difference was that we would see each other’s homes instead of offices and every meeting would start by comparing notes on each city’s lockdown situation, which brought the team closer together. It was also a fascinating experiment to put a full project team together; to interview local consultants and contractors and bring them onboard without ever meeting them in person. Our main challenge was not being able to meet with the City as our project is not considered “Essential”, but we have found creative ways around it to keep the project moving forward. This global pandemic has also sparked some dynamic discussions and rethinking of workplace design strategies.
Opportunities
As architects, we are trained to deal with wicked design problems; where there is a number of multifaceted, everchanging parameters that are constantly redefining the question, and as a result requiring lateral thinking and creative approach. I see the current crisis as another wicked design problem, with all of its unknowns and uncertainties, requiring us to asses and reassess the problem and continuously adjust and adapt as needed for the optimum solution.
This pandemic has given our industry the platform to start thinking and working more laterally than traditionally. We are already seeing how some of the technological and cultural shifts have taken shape out of necessity of the situation. In many ways, this crisis has been a catalyst for new ways that our companies operate, communicate, and cooperate with others. This is not to say that this will be the way of life, but as an industry we are building the infrastructure to be able to move things forward more collaboratively, efficiently and sustainably.
I am optimistic about the real estate industry’s future re-invention through this crisis and curious to see how as an industry we will not only survive, but thrive. I am also curious to see what traditional practices will become obsolete, and what new real estate related technologies and platforms will be adopted by the industry propelling us into a grander future.
Scott Bohrer
Director of Development, Browman Development Company
Observations
ONE WORLD: an often unimpactful sentiment meant to inspire a sense of unity, that in today’s pandemic reality has never rung more true.
The last two months have forced us to face this interconnectedness. The fragility of this ecosystem of which we’re a part can be felt at a global and local level, personally as it relates to our health, professionally as it relates to our daily work.
Our company specializes in shopping centers and retail centric mixed-use projects, and our sector has been one of those hardest hit. While office workers work remote, the Great Shutdown is threatening businesses that rely on their built environments to operate. To date we’ve received over 200 requests for rent relief, a number that continues to climb.
This ecosystem I speak to holds true across all asset types and industries. What impacts the customer impacts the business, which impacts the investor or lender and the wheel goes round. These challenging times remind us that our success ALWAYS relies on finding ways to provide value, and that sustained relationships are built on creating win-win solutions.
Unfortunately there is still a harsh reality: there will be winners, and there will be losers. Cheap money has facilitated leverage to sustain concepts operating on thin margins, and the current shock to the system will exacerbate the problems of these already struggling firms.
Opportunities
With all challenges come new opportunities, and this Great Reset will be no different. Despite the harsh realities, communities will come together to support each other as they have already shown themselves to do in the early phases of this new-normal. Specific to our industry we’ve seen many tenants respond with unwavering resilience, determined to maintain their staff and operate as allowed for a fraction of the compensation, and customers have rallied in support.
Omni-channel retail, the ability to provide a consistent customer experience online and in real life, has quickly gone from luxury to necessity. Those who have shied away from e-commerce and social media platforms have quickly been forced to join the 21st century. Fitness operators are rolling out live and on-demand classes, and stay-at-home policies have catapulted newer players like Peloton to new heights. To stay alive, restaurants that relied on dine-in customers are innovating the ways they reach patrons and deliver product.
On the other side of this unprecedented disruption we will return to a more normalized life, and while it may look different, I can assure you the places and spaces we socialize, shop, and sweat will be in higher demand than ever. As we return from quarantine it will be the brands that stayed in front of customers that will thrive.
This experience is also offering us the opportunity to re-evaluate the way we have been living our lives. Many have spent decades in the same routines, the same commute, the same office, without ever asking why. This is a chance to reprioritize our “work” alongside our health, our family, and our passions, all while being reminded of our potentially limited time here.
In the months ahead many of our members may face difficulty from the impacts of this worldwide phenomena, and during that time the community we co-create under the banner of ULI will be more important than ever. So lean in, find ways to stay engaged, and remember there is someone within arm’s reach waiting to support you.