Members of our Property Management team recently attended a luncheon by the Louisiana Chapter of IREM (Institute of Real Estate Management) at the Metairie Country Club. SRSA’s Mike Hilferty and Latter & Blum’s Joe Pappalardo Jr led a discussion focused on lessons learned and best practices for property managers in coping with the coronavirus. Representatives from Corporate Realty, JLL, and Louisiana Realtors Association answered questions on how they have responded to the challenges from the virus. Here are our top takeaways from what was discussed.
Work from Home Policies & Office Staffing
Multiple companies shared how their office policies changed & adapted to the coronavirus in order to mitigate its spread. Latter & Blum saw increased efficiencies when some of their employees worked from home. JLL noted that since they are a global company, a freeze on international travel was implemented. For domestic air travel, JLL employees must submit to a 14 day quarantine by working from home before returning to their office. SRSA implemented a shift schedule to allow for social distancing within the office. Both Corporate Realty & SRSA shared their policies for mask enforcement within the office.
Tenant Issues in dealing with Coronavirus
All respondents stated that their tenants have remained in business; however, some have been forced to leave their spaces due to the economic impact of the virus. Many tenants are described as struggling due to the absence of popular social events which previously drove foot traffic..
Corporate Realty shared how they manage contact tracing while protecting tenant privacy whenever a case is discovered.
Rent Collection Issues & Financial Assistance
The general consensus was that very few tenants refused to pay their rent. Many of the property managers were grateful of federal and local stimulus programs that enabled their tenants to stay afloat. However, it was noted that some tenants refused federal aid or did not qualify for it. (Many also look forward to the upcoming Louisiana Business Protection Program which could provide $300 million in funding for Louisiana based businesses who have 50 or less employees).
Numerous tenants have asked for rent abatement and deferrals. Those that asked for abatement required protocols to verify if they applied for SBA loans as well as checking their balance sheets. To those tenants who were deemed worthy, some managers deferred anywhere from 1 to 3 months of rent; however, very few actually totally waived the rent payments.
Current State of the Baton Rouge Market
The Louisiana Realtors Association shared how road traffic & activity was higher in Baton Rouge than compared to New Orleans. However, the commercial & multifamily sectors were down due to a lack of summer leases. Many multifamily complexes and retailers near LSU’s campus depend on the school’s summer semester for additional income. The residential sector was described as minimally affected with many home sales still taking place. On the other hand, many restaurants who were previously hoping for a Phase 3 reopening strategy, are refusing to reopen unless they are allowed 75% capacity or more. While some businesses are closed, it was noted that some retailers are enjoying success with opening their new locations in the city.
Special Preparations & Modifications to Buildings
Some of the property managers shared how they have installed or plan to install HEPA filters, U/V lights, & air scrubbers inside their buildings. Such devices would help to filter and kill coronavirus particles in the air. Adjustments to fresh air ratios were also noted as a possible modification.
Stay tuned to IREM's Louisiana Chapter Facebook to learn when and where July's luncheon event will occur. July's topic will focus on the impact of coronavirus on office & retail leasing.
