As a trusted partner to clients in multiple industries, LightBox is dedicated to tracking and understanding trends across all of the markets that we serve. On April 13, we launched a new Market Confidence Survey to collect data on the changing sentiments of our clients toward their markets over time.
To supplement our Commercial Real Estate Market Confidence and COVID-19 Impacts Survey, we invited homebuilders and land developers, property owners and tenants, technology companies, government agencies, investors, and other service providers to participate in this survey. All responses were collected anonymously, allowing us to help all of our customers understand their industry’s overall sentiment at this unprecedented time in the market.
Key Concerns Emerge
In our survey, the top three concerns expressed include:
- Rising unemployment levels
- The ability of the economy to resume previous growth rates
- The effectiveness of federal stimulus efforts
Another key concern among respondents is that retail is one of the hardest-hit markets during the pandemic and that it might not fully recover. “Retail has been hit so hard, we don’t know exactly how to plan for comebacks,” according to a retail property owner surveyed. “Our industry thinks only 50% of retailers will actually come back after the shelter-in-place is removed.”
Another retail operator added, “It is going to take landlords a long time to recover from the financial losses and new burdens (i.e. improving building common areas to minimize infection risks). Tenants are going to take a long time to recover financially as well. However, the biggest challenge in our near future will be getting tenants and their customers back to any real sense of comfort.”
Divided Sentiments and a Feeling of Uncertainty
A notable trend in our survey was that respondents were divided over a few key issues, and are generally uncertain about when their markets might return to pre-pandemic levels. We received responses ranging from one to five months down the road, though a majority of respondents expect that it may take until 2021. When asked to describe market conditions today compared to the month prior, respondents were split evenly between the beliefs that their markets were stabilizing and that market conditions were worsening.
A Changed Workplace
A trend in our findings was that, to no great surprise, the workplace has dramatically shifted in ways that we have all become familiar with during the pandemic. As is the case here at LightBox, remote work has become the norm for our survey respondents, with the majority reporting that all or most staff are working remotely. All respondents have placed limits on in-person client meetings in favor of virtual meetings, but the security of those meeting service providers is a concern for some. Some organizations, particularly in the government space, have restricted or outright prohibited the use of certain conferencing services.
Amid the switch to an almost entirely remote working environment, respondents uniformly have observed a slight dip in organizational productivity — most believe their organization is running at between 75% and 99% productivity. Additionally, nearly all responses characterized their organization’s March operations as weaker than February levels, and most expected April to be weaker than March.
Workloads and Projects are Shifting
Some good news to come out of our survey was that staffing has remained stable for the time being, according to most respondents. However, some organizations have begun downsizing, which may be related to shifting workloads. Most survey respondents characterize their organization’s activity level as about the same as it was pre-pandemic, though more have observed decreases than increases in activity. Respondents also reported experiencing each of the following in some form:
Most respondents also reported strategic shifts are happening from one project type to another, as COVID-19 has created new areas of demand for some organizations. We received a few responses noting that select staff has been reallocated to meet these new demands.
The precise impact that the coronavirus lockdown will have on our industry depends on a variety of factors, including how quickly the health crisis is controlled and stay-at-home orders are lifted. LightBox will continue to collect insights from our clients and report observations back to the market. To read our full report on the commercial real estate market, click here.
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Category Location Intelligence