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From Our Members: Observations & Opportunities
April 29, 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:
Sean Brooks
Director, Real Estate & Property Development, BART
Observations
The outbreak of Covid-19 has been a once in a lifetime experience. As humans we have the ability to adapt and switch gears when necessary. Often times, the constraints placed upon us or even those that we place upon ourselves, tell us that the possible is impossible. However, when we are forced to take certain actions like sheltering in place because it means our life, then we can get on board expeditiously.
This has been ever apparent at BART in terms of ramping up our cleaning efforts on our trains and overall system, providing for a remote work experience, procuring over hundreds of thousands PPE for our front-line staff, and leveraging available resources to sustain us during these times. The transportation business has taken a phenomenal hit. BART’s daily ridership is an abysmal fraction, currently hovering around 6% of normal. Service reductions have ensued for an agency where fare box revenue comprises a considerable amount of our operating budget, thus presenting a challenge and a reset.
Public transit is as essential as ever for our most vulnerable populations – those truly dependent on transit now make up a larger percentage of ridership. If BART shuts down, the Bay Area economy shuts down, and people’s livelihood and access to opportunity is threatened. Out of our stations with the greatest amount of ridership, the top 4 are still the top 4, which are DT San Francisco (Embarcadero, Montgomery, Powell, & Civic Center), but #5 is Fruitvale, which traditionally is #12 – #15. What this illustrates is that well planned transit oriented communities are better equipped to stand the test of time. Fruitvale offers a variety of commercial and public resources, (public library, charter school, child care facility, community clinic, retail) with varied housing options. Long recognized as a national TOD model, light is further shown on the daily sustainability efforts of our Real Estate and Property Development professionals.
Our employees like many others are grappling with work, distance learning for children, caring for elderly parents, maybe grandchildren, sometimes even disabled spouses; known as the club sandwich generation (generation that is helping to care for three other generations). These scenarios provide an opportunity to recalibrate and prioritize what is most important in our lives – health, safety, family, etc. All these conditions tug at our heart, but this resilience gives us optimism that we can conquer.
Opportunities
Space appears to be central in this evolutionary environment. Even after a sense of normalcy resumes, tightly packed trains may be thing of the past. With this scenario, an opportunity to re-program our trains, our stations, and our common areas are limitless with what we may be able to do with the physical public space given to us.
Additionally, our work space will look different. BART recently purchased a new building to serve as our Corporate Headquarters and is in the midst of going through a progressive design build process to program and construct tenant improvements. The notion of working remotely is developing; however, in the past few weeks we have learned that this is a viable option for some and can aid in reducing real estate costs. Crisis can result in innovation, allowing the ability to rethink and abandon traditional/high cost of capital practices. As stewards of public interests, the economic ingenuity is promising.
Overall, the opportunity to slow down, pivot, and transform helps us appreciate what we have and what is truly important to each one of us.
Lauren Krause
Senior Development Manager, Grosvenor Americas
Observations
A culture shift significantly redirects how we move through our lives. It often marks a distinct point in time. There’s a “before” and an “after”, like flying commercial airlines post-9/11. This pandemic will be that kind of marker; a comparison of how we worked and lived before and after.Already, we are talking about what returning to work will look like, how will we be operating in our offices that have become denser over time? How will mass transit function? At Grosvenor, our development team focuses on multifamily housing. What can we do for our residents to not only address real fears today, but proactively design and plan our buildings with an eye towards resiliency?I am curious to see how this pandemic shifts the conversation around factoring environmental risk into investments. It’s a bit of a wonky subject but considering the pandemic’s tremendous economic toll and how the outcome may have been different if appropriate proactive funding for pandemic prevention and response was prioritized. Hindsight is, of course, an unfair standard. But the global economy needs to rethink environmental risk factors, of which pandemics are a part.Thirty years ago, Susan Sontag famously wrote, “Everyone who is born holds dual citizenship, in the kingdom of the well and the kingdom of the sick . . . Sooner or later each of us is obliged, at least for a spell, to identify ourselves as citizens of that other place.” We will all know someone whose life was changed by the pandemic. I am hopeful that our shared experience will be a catalyst for more action. I believe that our capacity for empathy, gratitude, and cooperation expands when we are all facing the same challenge. Rarely in our lives has the global community been so united around a common cause.
A culture shift significantly redirects how we move through our lives. It often marks a distinct point in time. There’s a “before” and an “after”, like flying commercial airlines post-9/11. This pandemic will be that kind of marker; a comparison of how we worked and lived before and after.Already, we are talking about what returning to work will look like, how will we be operating in our offices that have become denser over time? How will mass transit function? At Grosvenor, our development team focuses on multifamily housing. What can we do for our residents to not only address real fears today, but proactively design and plan our buildings with an eye towards resiliency?I am curious to see how this pandemic shifts the conversation around factoring environmental risk into investments. It’s a bit of a wonky subject but considering the pandemic’s tremendous economic toll and how the outcome may have been different if appropriate proactive funding for pandemic prevention and response was prioritized. Hindsight is, of course, an unfair standard. But the global economy needs to rethink environmental risk factors, of which pandemics are a part.Thirty years ago, Susan Sontag famously wrote, “Everyone who is born holds dual citizenship, in the kingdom of the well and the kingdom of the sick . . . Sooner or later each of us is obliged, at least for a spell, to identify ourselves as citizens of that other place.” We will all know someone whose life was changed by the pandemic. I am hopeful that our shared experience will be a catalyst for more action. I believe that our capacity for empathy, gratitude, and cooperation expands when we are all facing the same challenge. Rarely in our lives has the global community been so united around a common cause.
Opportunities
Times of unrest and new constraints require creativity. And I’m particularly excited to see what we lessons we can take from our experiences. One of the silver linings I hope manifest into continued focus is work surrounding our ability to “flatten the curve” of climate change. Similar to a pandemic, climate change response requires action from a broad swath of the global community. Being an eternal optimist, I’m hopeful that the collaboration and quick actions we’re seeing provide a blueprint for the collective action required to address climate change.In my own home, I’ve been inspired by all the ways people are connecting with one another: book clubs, workout commitments, recipe exchanges. I love seeing my colleagues in their homes, the occasional cameo from a partner, kid, or pet warms my heart!I also appreciate how our perception of time has changed. As someone who overcommits herself and tries to operate under an umbrella of “efficiency”, it has been a welcome challenge to slow down and be present. Why do I need to rush my two-year olds through dinner anyway? I’ve been enjoying the things that “before” I would have deemed not efficient enough: gardening, making jam, reading the newspaper. But I still don’t bake bread.
Times of unrest and new constraints require creativity. And I’m particularly excited to see what we lessons we can take from our experiences. One of the silver linings I hope manifest into continued focus is work surrounding our ability to “flatten the curve” of climate change. Similar to a pandemic, climate change response requires action from a broad swath of the global community. Being an eternal optimist, I’m hopeful that the collaboration and quick actions we’re seeing provide a blueprint for the collective action required to address climate change.In my own home, I’ve been inspired by all the ways people are connecting with one another: book clubs, workout commitments, recipe exchanges. I love seeing my colleagues in their homes, the occasional cameo from a partner, kid, or pet warms my heart!I also appreciate how our perception of time has changed. As someone who overcommits herself and tries to operate under an umbrella of “efficiency”, it has been a welcome challenge to slow down and be present. Why do I need to rush my two-year olds through dinner anyway? I’ve been enjoying the things that “before” I would have deemed not efficient enough: gardening, making jam, reading the newspaper. But I still don’t bake bread.
Corie Edwards
Real Estate Attorney, Partner, Reuben, Junius & Rose, LLP
Observations
On February 16, I was in London, listening to news coverage about a cruise ship anchored at a Japanese port. How irrational it seemed not to allow people with a very serious medical condition to offboard. It was very sad, but very far away. Not anymore.
As of this writing, the New York Times reports that the COVID-19 global death toll exceeds 200,000. We have more than 50,000 Deaths in the United States alone. In a five-week period, over 26,000,000 people have lost their jobs. California remains under a shelter-in-place order, and it appears that the public health orders will extend through May of 2020. We have no cure, and the containment we have achieved has come at great cost.
I am a real estate attorney at Reuben, Junius & Rose, LLP. We represent a vibrant mix of real estate owners, developers, and construction professionals, large and small. Construction on many of our clients’ projects continues. My practice remains busy, but I find myself providing business counsel as often as I am providing legal advice.
Our family’s life has become very strange. My husband works in law enforcement. He works his regular shift. While three of us hunker down, he is taking care of the community, and taking care of us. I continue to work on programs for the 2020 ULI Fall Meeting, and monitor housing policy in connection with my work on the San Ramon Housing Advisory Committee.
Opportunities
The economic crisis we now face is vastly different than the 2008 Great Recession. This crisis does not differentiate between “us” and “them.” It will impact us all. In that commonality, there is opportunity.
As we self-isolate and plan our economic recovery, we can think – really think – about the small businesses in our community. We can be deliberate about the economic choices we make, and acknowledge that our choices dictate which businesses will survive, and which will not. We can be grateful for the people who support our own businesses, who educate our children, and who supply the goods and services we otherwise take for granted. One day, we will have the distance to remember how quickly things fell apart, and what it took to bring them back. We will have an opportunity to pursue policies that better serve our collective self-interest.
The concept of “collective self-interest” brings to mind what may be our greatest opportunity: support for workforce housing. The development community has struggled to overcome the stigma of “low income” housing development, and change what often appears to be an anti-housing bias in the public engagement process (particularly in affluent communities). Our “workforce” has finally been identified as “essential.” “Essential” too is housing for that workforce.
New York City, Seattle, Vancouver, and cities worldwide erupt nightly with applause for front-line workers: first responders, nurses, health care workers, delivery drivers. The light installation atop Salesforce Tower shows clapping hands in tribute. We have an opportunity to fundamentally change the dialog about workforce housing: who it serves, why we need it, and the consequences of our failure to provide. Let us not allow the opportunity slip away.
Bryant Sparkman
Principal, Century | Urban
Observations
Greetings and I hope this message finds you well and in good spirits despite the ongoing uncertainty in the Bay Area and the world, which touches us all personally and professionally. My thoughts are with my ULI colleagues and friends as we find new ways to adapt in order to continue operating our businesses.
Century | Urban, a boutique advisory firm, was born from the depths of the Great Recession, and our character was forged during the fire of crisis. We respond in times of challenge to formulate thoughtful and deliberate value propositions for public, private and non-profit clients. Although, I must admit, the speed and ferocity of the economic challenges and recession feel a little more frenetic this go around.
The public safety and economic challenges went from 0 to 60 in 2-nanoseconds, and each day has resulted in a hard U-turn, followed by an open lane to hit the accelerator, and then a pumping of the breaks. However, our overheated engines have resulted in a new spirit of innovation and entrepreneurship, which has been inspiring and uplifting.
Opportunities
Century | Urban is the definition of a boutique business, and we are learning to adapt and reimagine our “new normal” to protect the health and safety of our employees, their families, and how we respond to our clients. This has resulted in the obvious (teleconferences and finding new ways to deposit and write checks), and the less obvious: re-affirming our core values, standards and ensuring we are doing the right thing.
We see opportunity and renewed optimism as elected officials act responsibly and in a humanitarian way by opening parts of the country that are least impacted, by implementing cleaning protocols, wearing protective masks, practicing spatial distancing and keeping at-risk family members home. Yes, some businesses may not bounce back, but it appears we are inching closer to the intersection where public safety finds common ground with an economic recovery to bring Americans back to work, along with a sense of civic responsibility.
Another opportunity afforded by the pandemic, is the freedom to connect with family at home and to catch our breath after sprinting on the treadmill for 10-years and to take on that pesky home improvement project! I also want to acknowledge and express my sincere gratitude to the healthcare professionals protecting us on the front lines, and to ULI for re-connecting its members to foster collaboration and growth.