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.
In our first edition, we speak with Neil Dailey, SIOR, an office broker/manager at McGraw Commercial Properties in Tulsa, Okla. Coming off some interesting recent weeks in Tulsa, he shares his thoughts on his market and current conditions.
SIOR: Right this very minute, where are you working? And who or what (i.e. a pet perhaps) dictates your current work location?
Neil Dailey, SIOR: I’ve just returned to work in our office. In Tulsa, we’ve been elevated to a “Phase 3,” or basically back to pre-COVID activity. Our management has allowed people in the office, although not encouraged it, and still asked those that feel uncomfortable to stay at home as long as they like. We’re all just using our best judgement on coming in; asking for meetings or gatherings to take place off- site or holding them in the office on a case-by-case basis.
SIOR: What one change has been the most difficult to confront as a result of the COVID-19 pandemic?
ND: Adapting to less collaboration. We have a very “open door” environment here and are always yelling into the hallway about deals, contacts, procedures, wording on letters, opportunities, etc. To do away with that hurts the group as a whole. Especially our new agents that need that environment and mentoring to get acclimated to the profession. That’s been a hard loss for everyone, but we’ve tried to make do with Zoom meetings and at least one virtual Happy Hour.
SIOR: What strategies have you used to cope with remote work and the current state of affairs?
ND: We’ve held lots of video interviews with team members for updates on the market as we see it, and virtual tours of properties to allow people to “walk” the property without having to be on site. There has been a lot more communication. Also, a blessing has actually been getting a lot of “’round to its” completed. Everyone has those things they would like to get done when they “get around to it.” Upgrading to a new CRM, filing, integration to G-suite, compiling historical sales numbers, increased marketing presence on social media, building distribution lists, etc., have been things I’ve been able to cross off my list.
SIOR: How is your company encouraging collaboration and unity during these times?
ND: Collaboration is slowly coming back as people are re-entering the office. Prior to returning to work, we tried to maintain collaboration via web meetings, but there is no substitute for brushing shoulders with people in the office, hallway, coffee pot, etc.
As for unity, we have a wide range of ages in the office, from 25-75 years old, as well as various backgrounds, military experiences, community involvement, and social viewpoints. There are discussions happening in small groups and we are on the cusp of our first team meeting since a Trump visit to Tulsa and a very successful/peaceful BLM rally in the historic Greenwood area of downtown amid a spike in COVID cases across the state.
Tulsa has been in the news over the past couple of years, not all positive, via books (Killers of the Flower Moon), TV Series (Watchmen), activity by our civil leadership to find burial sites of the 1921 Race Massacre, and now successful BLM demonstrations. I’m encouraged to know that we have respectful viewpoints through each other’s lenses here at the office currently.
SIOR: Have any areas of your business come to a standstill?
ND: Office leasing has been pretty dismal. There have been a few large deals made downtown by two law firms, but by and large the oil/gas market has been hit fairly hard and there is a plethora of sublease space available on the market right now. Combined with a historically low office rental rate, it’s pretty difficult for most brokers to find those larger deals.
The industrial market is still strong, but I had three deals pause to confirm their backlog of work. I estimate that they will be ready to commence in the third quarter. Still, the market is over 95% occupied.
Multifamily is strong and very active. Retail is hanging on but surprisingly still making moves, even in the QSR space.
SIOR: Are there areas of your business that are still going strong? What deals have you managed to continue to push through, if any?
ND: Of those three 40,000 sq. ft. deals I mentioned that were paused until Q3, one of those will most likely grow to double in size as they shutter a division in another part of the country. So manufacturing is still making adjustments and I believe that most just want some comfort in knowing things are starting to return to normal before moving forward with a large purchase, lease or expansion.
Aside from that, I represent a large C-Store group and they have continued to acquire sites with a long-game in mind.
I also have searches ongoing for one bank location and one financial service's HQ.
SIOR: What changes are you seeing in your market that you expect will remain after the pandemic subsides?
ND: Our office has embraced new technology. I believe that has been a silver lining for us. We have updated our marketing platforms, started culling our email database, begun promoting properties and also interviewing our agents for their perspectives. We’ve only just begun our recorded interviews and are continually getting better. Even with our first five videos, we’ve garnered thousands of impressions and have had the desired effect of people reaching out to us to be put on our distribution lists.
Handshakes are one of the things I miss the most. Every now and then it slips and I’ll get one in, followed by a squirt of sanitizer, but by and large it’s an awkward elbow bump or a sheepish wave. I hope we get back to the handshakes—it’s such a solidifier in meetings and negotiations.
SIOR: What is your confidence level in your industry and what most keeps you up at night?
ND: The thing to take solace in is that we are still human. We crave interaction. Office spaces are not going to die and everyone will not work from home forever. Sure there will be a wave of people that start to work remote more often, and the industry will adjust, but I believe that over time, businesses will miss that collaboration and it will swell back in the direction of pre-COVID.
I also feel that companies looking for space will be underwriting buildings much differently. The selling points are going to be much different and will include information on things like: cleaning, sanitation, HEPA air filters in the building/suites, touchless gadgets (doors, elevators, sinks, toilets, etc.). Also, people that did enjoy working from home may enjoy the flexible schedule as well as quality of life elements in the office. Rooftop space, green areas, exercise equipment, yoga, delivered/catered lunch options, etc.
All in all, the human element is what will keep us together and working together in some capacity.
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?
ND: There is a common belief that spaces will shrink. That may be true in some cases, but the opposite side to that is that the businesses may end up taking MORE space to account for the increased personal distances, the reduction in bull pen settings, and more hard walled offices. The economics will still need to get worked out but I believe office owners are happy to cater to more square footage in the current climate.
SIOR: Prior to COVID, how was the market in your area?
ND: The office market was decent and new product was coming online in the CBD. Rates were increasing and we had a very positive, progressive vibe in town. We’ve had a very low/static office rental rate for the last 20 years and it was starting to tick up with new Class A product being delivered, new HQ downtown, new multifamily deliveries in the core, etc. Things are still progressing, but the oil/gas environment has a perceived negative impact.
SIOR: How do you expect the market to look two months from now? Six months from now?
ND: Two months from now we’ll be in Q3 and two months away from a presidential election. I believe that there will be a resurgence of the virus, but oversight will be less enforced due to a want/need to return to business. Also, you’ll have kids going back to school. It’ll be interesting if the virus spikes high enough for schools to go back to distance learning. If so, that will stall the return to the office because parents will need to stay home with kids.
Six months from now we will have made a decision in the presidential election and two very different paths could be chosen. If businesses re-open, virus cases hold/decline and confidence in the economy remains high, expansion will continue. Otherwise I believe it would be a less optimistic economic recovery.
SIOR: Are there any changes you’ve implemented that you personally hope will continue?
ND: I enjoyed my time at home for the most part. I have four small children and I was able to spend quite a bit of time with them while still working from home. Luckily, I was able to isolate myself in the house when needed. The flexibility, the ability to work in some exercise during the day, and time to concentrate on projects was nice. I also value the steps we made in preparing ourselves for a more digital future.
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?
ND: We’re all human. We all want stability. We all want security. We all want safety. We all want to prosper. Respect for others, desire for growth/prosperity, and a renewed focus on the family are a few of my biggest observations and integrations.
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?
ND: Keep dry powder. Buy stock in web conferencing technology, Amazon and whoever makes Charmin!
Neil Dailey, SIOR, is broker/manager at McGraw Commercial Properties in Tulsa, Okla. He has been a member of SIOR since 2019 and can be contacted at email@example.com.