How Real Estate Can Prepare For The Unknown Outcomes Of Pandemic Management
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Once we are past the current pandemic, what will it be like to proceed along with a normal life and commerce without the fear of illness or shutdown and isolation? While there may be a flux in what life looks like as we move through the pandemic, I can confidently say that in my experience selling and leasing a varied property line, the one constant is people. A property of any sort is just a shell and lifeless without them. In order to move forward, it’s important for owners and operators to establish the value and use of properties by instilling a sense of safety.
How this will be accomplished is in the making as we speak, but it’s not a work of art just yet. Those with a technocentric worldview may look at it as a chance to test systems to monitor outbreaks in order to potentially control them. Most experts cite testing as a major factor in giving officials the ability to better control outbreaks. In terms of sharing this information, world leaders have no shortage of ideas. UK Health Secretary Matt Hancock hinted at immunity passports earlier in the pandemic, but now officials steer clear of that designation.
In the U.S., prominent health leader Dr. Anthony Fauci also mentioned a similar immunity certificate earlier in the pandemic, but that was then. The Covid-19 Credentials Initiative (CCI) is working on a digital certificate, using the recently approved World Wide Web Consortium (W3C) Verifiable Credentials standard. The certificate lets individuals prove – and request proof from others — they’ve recovered from the novel coronavirus, have tested positive for antibodies or have received a vaccination, once one is available.
While many are on hiatus, we need to come to terms with what makes sense regarding the various proposals and ideas. Many of us have a lot at stake — our lives, earthly wealth and endeavors, families, friends. While the experts continue to cultivate a path forward, it’s important for those in the real estate industry to prepare for anything. There are a few areas property managers and owners can look over now to prepare for any outcome.
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If I am asked at this moment by a client or anyone what my building is worth, the answer would be the child of alchemy. The liability of suggesting that your property — whether owned or leased — is safe to enter could lead to great loss. First of all, based on what can you make this claim? If your property isn’t safe, then what is it? Other parts of the world as well as the U.S. are looking to address this issue. Remember, the question is what is my building worth? The answer to that would have to be, is it safe? Value and use, in this case, are second and third importance.
Property managers and the owner should sit their insurers down now to make sure they are in line with current liability standards. Engage legal counsel for lease reviews of current and newly constructed leases to attempt to mitigate exposure.
There’s An App For That
It would not be surprising to see a mobile app acting as a tool for property owners to gauge whether or not a person has tested negative for Covid-19 and can enter the property. There is also the factor of vaccine distribution to consider. In both cases, there is still a number of unknowns around the prevalence of digital health credentials.
As with any technology installed in a property, it has to bear the desired results and have a sustainable life span. What may be a thoughtful enhancement to building safety may be just the opposite, so check with your attorney. Liability issues are many if you suggest your property is safe or less risky. Prove it. This issue affects tenants as well and any contracts going forward should address to some degree pandemics.
The fact is that in order to use any public or by invitation property, people will need some sort of assurance of safety. My view is that a government backstop to liability is the best solution, coupled with an effective vaccine — but even I can’t predict the future. While the specifics of Covid-19 tech, testing and vaccine documentation are unknown, there are still things property managers and owners can do now to prepare. However the future looks, I believe that in order for real estate to continue as an asset class, we must stop to consider the possibilities.
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