There was a lot of confusion among construction and development firms in March of this year, as markets and some worksites around the country shut down due to the COVID-19 crisis. In the subsequent 10 weeks, we’ve gotten some clarity and much of the country has opened back up—but there remain obstacles in the weeks and months ahead.
As part of REjournals’ Breaking through the Disruption webinar series, five industry experts deliberated a range of topics, such as site disruption, safety concerns and even the legal issues of face recognition software.
Rich Reizen, partner and chair of the construction practice at Gould & Ratner moderated the discussion. Joining him were James A. Brucato, president, Principle Construction; Elizabeth Boddy, of counsel at Taft, Stettinius & Hollister LLP; architect Alba Colavitti, AIA and Adam Moore, senior regional manager at First Industrial Realty Trust.
Many jurisdictions lumped construction in with essential work, so for the most part, few sites were mandated to shut down. That doesn’t mean that developers or the clients couldn’t hit the pause button, however. But according to the panel, sites that were allowed to remain active mostly forged ahead.
In her experience, Boddy said that those projects that were fully funded have continued unabated. Brucato agreed, adding that for jobs in pre-construction mode, roughly half are moving forward, and half have pumped the brakes. For those latter projects, he believes most clients plan to continue once they have a better understanding of where things are.
COVID-19 is also forcing sites to implement new safety measures. Sourcing masks, hand sanitizer and other PPE is one challenge, but the six-foot separation between individuals brings about unique obstacles at a worksite.
“I can’t remember a day before this where we would have ever rejected 15 more electricians coming to a site,” said Brucato, “but it happened on one of our projects.”
Looking out on the horizon, the pandemic is sure to have ramifications for how future spaces are designed. Colavitti pointed out that the crisis has shown us how important truck drivers are for our day-to-day lives; as such, industrial facilities should incorporate more lounge areas and other accommodations for these workers.
Fear of contracting the virus means that many commercial properties are looking to install as many touchless interfaces as possible, from automatic doors to motion-sensing faucets. On the security side, many buildings have taken their cues from Hollywood, installing iris scanners, fingerprinting and even voice printing to access more secure sites. Boddy said that wider use of these technologies should be explored with caution.
“There is risk that if biometric data—because it is a unique personal identifier—should be misappropriated, that’s identity theft that is unrecoverable,” Boddy said. “The use of that data has to be very closely safeguarded.”
According to Boddy, three jurisdictions—Texas, Illinois and Washington D.C.—already have laws in place to address this issue, with Illinois’s statute being the most stringent in the nation. Building owners, operators and tenants must be aware that biometric data cannot be collected here without consent.
“The biggest thing that we’re seeing right now is just uncertainty,” said Moore. “Nobody knows what the world’s going to look like when we come out of this.”
Moore has seen two consequences so far from the COVID-19 pandemic. The first is that tenants with near-term lease expirations are opting to extend for a couple years as they wait to see how the economy rebounds.
The second issue is reduced office space. This has been a concern for owners and managers of high-rise office buildings, but he’s seen it already play out with his warehouse distribution tenants. Many existing users and some build-to-suit clients are looking to shave some square footage off of their office component. With more front-of-house employees able to work from home, this space is sitting fallow and can better be used as part of the larger warehouse.
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