In an industry known for personal relationships, the pandemic has certainly altered the way commercial real estate professionals work. An informal survey conducted by CREW-St. Louis (Commercial Real Estate Women) in late April did not reveal any shocking surprises. The 30 members who completed the survey left little doubt that work and life have been impacted by the pandemic and subsequent stay-at-home orders throughout the St. Louis region.
Half of the members noted that their companies are conducting “business as usual during these challenging times,” while 43 percent said it’s somewhat affected how business is conducted within their companies.
But all members have noticed changes in how they do business.
By and large, working from home has replaced working at the office. This has presented challenges for many.
“Those with younger children are playing parent and teacher at the same time as juggling their work responsibilities,” one member stated. “Simple tasks are no longer simple. Social distancing has really affected morale for everyone.”
“Communication is challenging,” another member noted. “What was once a two-second comment is now multiple emails. And parents are juggling kid time with work time with varied success.”
Another said, “Video calls for everything and instant messaging for quick communication. We are missing out on professional development and networking events for meeting new people and hearing new ideas.”
All but one of the respondents said their workload has been affected by the stay-at-home orders.
The biggest impact depends on the member’s discipline. In particular, bankers have been inundated with helping companies apply for PPP (Paycheck Protection Program) loans. Those in the accounting field have supported clients, too, and have found that the extended deadline for tax filings has expanded their busy season.
Brokers have found that deals have been delayed, and the outlook for retail “is very grim,” a member noted. Service firms such as architects and interior designers also have projects that are winding down but foresee a slow down on the horizon.
As work from home took hold, many companies upped their investment in technology and the IT infrastructure to support their employees, members said. The short-term change of working remotely may also become a long-term change.
“The C-suite may now consider WFH under normal circumstances since our employees have shown that it can work without negatively impacting utilization or profitability,” a respondent said.
“We will be revisiting our working remotely options and offerings for staff members,” a respondent noted, “updating our processes and procedures to adapt to those choosing to work remotely. We also are surveying whether we need the amount of office space we are currently leasing or looking to lease in the future.”
Unfortunately, some companies have had to pare expenses, too. For some, that meant reduced pay and benefits. “Short-term pay cuts and pauses on raises/bonuses that typically hit at the beginning of the second quarter” are occurring, a respondent noted. “Layoffs have occurred and the longevity of those is unknown.”
Eight of 10 respondents noted that their organizations had yet to furlough employees to allow workers to file for unemployment.
One respondent noted the company carefully reviewed salaries and workloads to determine how best to help employees who live on the Missouri and Illinois side of the river. The company reviewed their salaries to see how employees fared. Balancing salary and workload allowed the company to furlough 18 workers “with every intention of them coming back full time as soon as possible.”
One-third of the respondents noted that their organizations had either temporarily cut pay or reduced work weeks, or both, to weather the impact. Another 10 percent expect their companies to do so.
As a member noted, “We may see potential pay cuts across the board once PPP Paycheck Protection Program) funding is used.”
As for PPP loans, 17 of the 26 members who responded said their firms had applied for funding. Some failed to receive it when the initial funding ran out. Some that did receive it were holding it for emergencies. “It’s intended for use as-needed in the event clients default on their payment of our invoices,” a member noted.
The program’s success presents a mixed bag.
Those that qualified praise the program. “The PPP is a great program. We are fortunate that our banking relationships are strong and, consequently, it was a fairly easy process,” a respondent said.
Some used it to preserve resources. “Like many companies, we filed for this loan/grant as a hedge against what we feel is coming in the near term,” a respondent said. “It’s a great opportunity for businesses to have extra capital in these uncertain times,” another member noted.
But some worry about the funding’s rules. “I have concerns regarding the criteria for forgiveness in eight weeks,” one member said.
The inability to either get or qualify for the program is the biggest criticism. “It has been frustrating for our small business clients that did not receive funding from the original launch of the fund and reading about larger companies that are receiving funds. Expectations were not met that small businesses would qualify first since this was a loan program from the SBA,” a respondent noted.
Another service company said, “Many of our clients are having issues because they use independent contractors rather than employees and are therefore not eligible. We also have clients who are concerned that, because of the stay-at-home orders, they will not be able to re-hire employees and therefore will lose the loan forgiveness.”
Looking ahead, the uncertainty of the COVID-19 pandemic looms large.
“The biggest problem with business and personal issues is the uncertainty,” a member noted. “News that we may be reopening on May 5 (a date that was extended in the St. Louis region) is actually more worrisome than gladdening. What does this mean? How will we do it? What responsibilities do we have to our employees to keep them separated even though it’s no longer required?”
CREW-St. Louis is one of the largest of CREW Network’s global chapters. Its more than 200 members come from all disciplines in commercial real estate. The mission of CREW-St. Louis is to advance, educate and support women to influence the region’s commercial real estate industry. For more information, visit www.crewstl.org.