This SIOR Pulse blog series connects with SIOR members across the globe to discuss business and market conditions, while discovering the current events and issues impacting their daily lives.
We spoke with Aaron Barnard, SIOR, senior director and office specialist at Cushman & Wakefield in Minneapolis, MN. What does the office market look like in Minneapolis? What confidence does he have for the next six months? We sat down with him to discuss.
SIOR: Right this very minute, where are you working? And who or what (i.e. a pet perhaps) dictates your current work location?
Aaron Barnard, SIOR: I go in twice per week typically, Mondays and Wednesdays, and the rest of the time have worked from home or meeting tenants/buyers on site.
SIOR: What one change has been the most difficult to confront as a result of the COVID-19 pandemic?
AB: Office clients simply don’t know what their future needs are. Many are saying that they “can’t wait to get back in the office,” but at the same time, tenants are trying to ascertain how many will require permanent space in the office.
SIOR: What strategies have you used to cope with remote work and the current state of affairs?
AB: The key is logging-out during the evening and weekends, otherwise you work all the time and never disconnect! Finding a balance and time for yourself is key.
SIOR: How is your company encouraging collaboration and unity during these times?
AB: Both the company and my peers are promoting connectivity via scheduled conference calls. We hold both larger and small team calls to ensure the sharing of the most recent trends and movements in the market.
SIOR: Have any areas of your business come to a standstill?
AB: New leasing is slow but inquiries are now on the rise. Many tenants that start a search end up renewing for a short term (one to two years) in their current location. The good news is that there is still some activity and each day there seems to be more confidence as the vaccine roll-out increases.
SIOR: Are there areas of your business that are still going strong? What deals have you managed to continue to push through, if any?
AB: User sales are strong. Low interest rates can move the "lease vs buy" question to the latter.
SIOR: What changes are you seeing in your market that you expect will remain after the pandemic subsides?
AB: We will likely see a long, slow recovery to the office market – particularly in the Downtowns of the U.S. that rely on mass transit. Also social unrest in some markets is further complicating the return to work equation.
SIOR: What is your confidence level in your industry and what most keeps you up at night?
AB: The industry will evolve – we just have to keep adapting and be a consultant for life. Real estate still trades no matter what the market is doing.
SIOR: What do you predict reopening businesses and workplaces to look like and what needs to happen—or what is currently happening—to facilitate that in your area?
AB: Surely it will be case-by-case and industry-by-industry. Some folks may opt to work from home the majority of the time, others will want to be full time at the office. The $64,000 question is how will the office space look for the folks that are part time work from home and part time work from the office? Office space design will likely increase on a per square foot, per person basis, but at the same time less people will be in the office simultaneously.
SIOR: Prior to COVID, how was the market in your area?
AB: Very solid – but office space utilization was waning a bit as remote work was trending. COVID sped up the reevaluation of the work space.
SIOR: How do you expect the market to look two months from now? Six months from now?
AB: Two months from now, we will see more and more traction as firms figure out what their future footprint needs to be. As I talk to business owners and brokers, activity is up from Q4 2020. I see this trend continuing. Six months from now, if vaccination success rates continue, I believe we will be very busy.
SIOR: Are there any changes you’ve implemented that you personally hope will continue?
AB: I’ve been blessed with clients that dug in and dealt with the situation. Much of my work is landlord-based and we have made a point to check in on tenants and open a line of communication. We’ve allowed flexibility in length of lease term and expansion/contraction clauses. We’ve all heard that “we are in this together,” but it really is so true! And everyone doing what they can is the solution that will speed up the recovery.
SIOR: What has been your biggest takeaway from all of this? What’s the one thing you have learned that has impacted you the most?
AB: As always, just be there for clients – we need each other. And that transactions are only part of what really matters.
SIOR: If you could go back in time one year, what is one thing you would tell yourself to best prepare for this upcoming year?
AB: Wow, that is a hard one, this has been such a crazy 12 months! The silver lining has been time with my immediate family. We’ve taken a few car trips that would not have happened without us all being at home. We are also eating meals together on much more of a traditional schedule. It sounds crazy but we were all moving at 100 MPH in different directions prior to COVID. What was the question 😊?
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Aaron Barnard, SIOR, is senior director and office specialist at Cushman & Wakefield in Minneapolis, Minn. He has been a member of SIOR since 2009 and can be contacted at aaron.barnard@cushwake.com. |