Hey there, time traveller!
This article was published 6/7/2020 (312 days ago), so information in it may no longer be current.
Sandy Shindleman’s career in real estate stretches back nearly 50 years, and it might be divided neatly into two eras: before and after COVID-19.
The president of Shindico says that’s the reality for the real estate industry, which has always been subject to market shifts and changing values. But there has never been an outside force that’s had such a swift or broad effect as the pandemic.
So it came as no surprise to Shindleman when the novel coronavirus was given the No. 1 slot on the Counsellors of Real Estate’s (CRE) top 10 issues that will affect the industry this year and next.
The top 10 — rounded out by economic renewal, capital market risk, public and private indebtedness, affordable housing, flow of people, space utilization, technology and workflow, infrastructure, and environmental-social-governance concerns — might as well have been a one-item list. None of the other issues exists independently of the pandemic.
"It leads into absolutely everything else," said Shindleman, a member of the CRE.
"I've been around a long time, and one thing I realize is people tend to forget. But I don't think we're going to forget (this)."‐ Sandy Shindleman, president of Shindico
Certain areas like personal, data, and cold storage haven’t been hit quite as hard as, say, office or retail sectors, but they aren’t out of the woods yet. "We talk about this sometimes, it feels like it’s been five years (since COVID-19 happened). It’s been only three months."
Shindleman said what’s happened — a shift to working from home, a major blow to physical retail, an unprecedented number of layoffs and salary reductions, usually viable commercial renters struggling or refusing to pay rent, to start — would have seemed impossible just a few months ago.
But it’s happened, and the industry will attempt to navigate the new reality, just as all other industries.
"It’s basically a gut-check," Shindleman said.
At Shindico, the pandemic has not led to any layoffs, but it has changed the company’s normally rapid pace from a sprint to a speed walk. The company implemented a hiring freeze; it didn’t take on any summer students; and its development has slowed significantly, Shindleman said.
"We’re lowering costs to the best of our ability."
Several projects face challenges or delays, including future phases of the Plessis Business Park and the construction of the Taylor Lee luxury apartments, a 124-unit building set to break ground soon. Meanwhile, the company’s and Cadillac Fairview’s proposed Polo Park residential project has been held back by delays from the city, as well as concerns from the Winnipeg Airports Authority.
Plans for new retail buildings have been put on hold, Shindleman said.
Planned renovations at Shindico apartments have also shifted in response to the pandemic: at some buildings, a few units were to be converted into common areas, Shindleman said.
Most upgrades being made or discussed are barrier-free ones like electric doors or touchless elevator operations.
"We’re very much thinking of touch," he said.
While industrial real estate appears to be primed for a strong rebound, Shindleman said the future of the office and retail sectors are tougher to pin down. One hopeful prediction, he said, is that dormant suburban retail space can be reconfigured as office space and compete with downtown office buildings.
"Just think about it," he said. "Downtown, you’re parking cheek by jowl in an eight-foot spot. You’re going into an elevator lobby, into an elevator… you get up to your floor, you use a restroom that is public, possibly shared with other tenants on the floor."
In comparison, a spot in a suburban strip — where public interaction is minimal, sanitization and entry are controlled, and spacing can be readily configured to the COVID-19 era — might seem more appealing than it might have been in the past, he said.
For the near future, expanding or signing new leases might be off the table for some companies, even Shindico. The company recently contemplated expanding its building’s main floor, but now, Shindleman isn’t sure whether the move is needed.
"We have to be very cautious with expansion," he said.
While COVID-19 was ranked the top issue for 2020 and 2021, Shindleman acknowledged its effects will be felt for years.
"I’ve been around a long time, and one thing I realize is people tend to forget," he said. "But I don’t think we’re going to forget (this)."
Ben Waldman covers a little bit of everything for the Free Press.