When the novel coronavirus pandemic forced all two dozen workers at David Eyzenberg’s eponymous real estate investment bank to work remotely, its founder and president was quietly pleased—at least at first.
Work was getting done. Technology—email, Microsoft Teams and omnipresent, omniscient Zoom—meant that communication was happening, too. And then there were the intangibles: more time with family and less time commuting, not to mention the bottomline savings when no one’s going into the office.
“As a business owner, the prospect of not having to have rent as an overhead was just lovely,” Eyzenberg said from his Miami home. “And I felt that in at least the first few weeks that we were really functioning well.”
Then those first few weeks turned into months, and remote work lost its luster. What happened with Eyzenberg & Company highlights what’s happened across much of commercial real estate in terms of how professionals and their firms actually got the job done, and what they’ve learned from the experience.
Much has been made about the sudden shift to working remotely—and to whether that will become the new norm in some form—but little attention has been paid to the day-to-day of what has and hasn’t worked in terms of work.
Not everybody can have one, but a home office certainly helps when working from home. The same goes for prior experience with the setup. And that’s not just anecdotal. Cushman & Wakefield surveyed 40,000 office workers from myriad industries worldwide about their COVID-era practices. The results from “The Future of Workplace” came out in late June.
“People who both had experience working from home prior and people who had a dedicated place to do their work were having better experiences,” said Rachel Casanova, Cushman & Wakefield’s senior managing director of workplace innovation.
Beyond having this ideal physical setup and work-from-home background, everyone in commercial real estate seems to agree on one thing: “Too much communication is better than not enough.”
That was one of the pieces of advice on an online rundown that Newmark Knight Frank’s workplace strategy and human experience team put together to confront what it described as the “new normal with COVID-19.” Regular virtual communication came up repeatedly in Commercial Observer’s interviews with commercial real estate professionals. It was something they adopted very early on and without question.
For Jerrod Delaine, real estate asset management and construction director for Manhattan-based Carthage Real Estate Advisors, communication while working remotely has meant daily phone calls with field staff, including standing weekly phone calls at set times with contractors and lenders. Then there’s the daily staff call at 9:30 a.m. every weekday morning. “It allows us to touch base,” Delaine said over email. “And also the nuances of projects can be discussed.”
Eyzenberg said he and his staff “were communicating as much as we ever were” even with everyone out of the office. Plus, he was saving as much as two hours a day by not commuting—a quickly realized shift that came up repeatedly in discussing whether working remotely worked.
“If I have to be at my desk by 8:30, I can sleep until 8,” said Thomas Fulcher, a vice chairman and co-regional manager at Savills based in Washington, D.C. (though he noted his commute by bike was probably one of the more idyllic in the industry).
Filling the extra hours, then, has not proved a problem for commercial real estate professionals. The communication through conventional conference telephone calls as well as newer vehicles such as Zoom and FaceTime facilitates the same interactions within the employee ranks—and from manager to staffer—as before the pandemic.
It’s once you get outside of that dynamic that things get more complicated.
What didn’t work
Diego Hodara is the chief executive and founder of Titanium Realty Group, which specializes in development in the New York area. Working remotely, or telecommuting, wasn’t a problem for the firm itself. “We can work very efficiently virtually,” he said.
It was things beyond Titanium’s control that posed challenges. In particular, the pandemic caused delays in permitting and other approvals and on inspections. Hodara said the disruption put his and other development-side companies at the mercy of government bureaucracies not as equipped to suddenly shift to working remotely.
Others reported difficulty in the sort of networking that fosters deals that lead to developments, leases, and other arrangements such as financing. It’s hard to create those connections on Zoom rather than in person. “This is a relationship business,” Delaine said. “At some point we’ll have to find a way to continue to generate new business and contacts.”
Firms are also having contact-related trouble when it comes to onboarding new employees and mentoring less experienced ones. It’s one thing to communicate virtually with fellow professionals you’ve had regular in-person contact with for years. It’s another to inculturate the newbie.
“The people I deal with everyday and I’m comfortable with, I call them and it’s sort of a continuation of what we’ve had,” Fulcher said. “I think for new people coming in, though, it’s not the same. Where you would sort of walk down the hall, sit down with them, chat with them, now it’s more of a remove and it’s very hard to have that level of communication.”
It was what soured Eyzenberg on working remotely. He was pleased with the efficiency his firm showed early on—he even wrote a LinkedIn post on the experience—but then it came time to acclimate a new hire and things there were challenging. “Getting that person in that flow was very difficult,” he said.
This probably helps explain a result of the Cushman & Wakefield office-worker survey: 70 percent of Generation Z and 69 percent of millennials reported challenges in working from home, while 55 percent of older baby boomers did. Some of this had to do with what the survey referred to as “life stage challenges.” For instance, younger workers are likelier to have roommates—a potentially major distraction—and to have to juggle care for young children. A lot of it might’ve had to do with this lack of experience at specific companies.
Speaking of distraction, having more time does not exactly translate into getting more work done. About one in four workers have difficulty focusing on collaborative projects both in the office and at home when it comes to doing their jobs, according to the Cushman & Wakefield survey. Though that approximately 75 percent who do not have trouble focusing represented a 10 percent increase from before the pandemic. Cushman & Wakefield says that this change is due to the pandemic forcing remote workers to better utilize technology that fosters collaboration—the same technology they might’ve more readily ignored in the office.
Even with the challenges, though, working remotely is probably here to stay in a bigger way in commercial real estate. The pandemic-related lockdowns have proved the model can work, at least part-time. Leases, sales, financing, even construction permitting—all of it has gotten done amid the coronavirus; perhaps not at volumes seen before, but done nonetheless.
Savills’ Fulcher said the experience of the past few months should have dispelled managers’ doubts about employees’ effectiveness working outside of the office.
“Do we know they’re engaged or are they just walking their dog and hanging out watching YouTube views or whatever?,” he said of a previous line of thought. “I think that, for the most part, is done. I think it’s going to feel like, ‘You know what, if you want to work from home, you’ve proved over the course of many months in 2020 that you can do it.’”
A major conclusion of the Cushman & Wakefield survey was that nearly every respondent felt they were now trusted to working remotely. A further 73 percent now expected their companies to arrange for some level of working from home.
It won’t work for everyone. Much of the success of telecommuting is built on those long-term relationships among employees. Those that miss the interaction or the potential for networking will be more eager to return to the office post-pandemic.
“I will tell you if I told the company, ‘We’re just going to be remote,’ I’d probably lose half the company immediately,” Eyzenberg said of the feedback he’s gotten from employees.
Then there are the commercial real estate firms that have cut jobs and don’t have to consider bringing as many employees back anyway. And there are those that need the bureaucracies, including municipal planning and buildings agencies, to return to normal before they can even mull playing the working remotely long game. But for many, if not most, firms, remote working is going to play a bigger role going forward.
Interestingly enough, if there’s one industry that knows if it could work from a nuts and bolts perspective, it’s real estate. Cushman & Wakefield’s Casanova noted that the commercial real estate industry has known for years that most office space is utilized maybe only 60 to 70 percent of the time. Workers vacation, they go on business trips or on leave—for whatever reason, a lot of space goes unused, yet still has to be paid for and serviced.
Maybe that’s what tips the decision-making on telecommuting in the end, after considering what worked amid the pandemic. Whatever the reason, the trend, forced upon the industry as it was, will survive in some unavoidable form.
“I think it’s evident that, ‘Yes, and’ is a likely answer,” Casanova said. [Commercial Obersver]