Commercial Investment Real Estate Summer 2020 | Page 11

SENIORS HOUSING RESPONDS
TO MOUNTING PRESSURE
FROM PANDEMIC
MIXED-USE DEVELOPMENTS
CAN KEEP IT LOCAL
SUPPLY CHAIN REACTS TO
SOCIAL DISTANCING
SELF-STORAGE WEATHERS
EARLY COVID-19 STORM
This page, left to right: Cecilie Arcurs,
Nirian, 1933bkk, Owaki Kulla
Plenty of media attention has
focused on COVID-19’s increased
mortality rate in older
individuals. The Centers for
Disease Control and Prevention
estimates nearly 80 percent
of deaths in the U.S. occur
in people aged 65 or older.
These numbers are harrowing
for owners, operators, and
employees at seniors housing
facilities. Due to the increased
costs and an expected decline
in occupancy, the sector is
looking at real-time data to
help forecast the continued
impact of the pandemic.
Ventas, a Chicago-based
real estate investment trust
that’s among the country’s
largest holders of seniors housing,
announced rent deferrals
for some of its operators in
April. Such actions could be
much-needed relief to struggling
facilities, though Ventas
noted deferrals will only be
offered to locations that do not
receive government assistance.
“There are now strong
indications that tours and moveins
are beginning to slow,” Ventas
said in a recent statement.
Two executives with Gensler,
J.F. Finn and Duncan Paterson,
believe mixed-use developments
could see a boost in
light of social and economic
changes. The pair write how
microgrids can improve efficiencies
for self-sustaining
districts. A localized energy
source improves flexibility and
decreases waste. Additionally,
mixed-use spaces encourage
shared environments that can
provide an array of products
and services safely and efficiently.
Inhabitants, the pair
write, will be closer to health
services in a self-contained
area, while such a hyperlocal
arrangement may improve a
sense of community.
“This means that both
the physical construction —
the infrastructure, systems,
and assemblage of uses — and
the human places — the public
spaces, communal areas,
and places for dynamic collision
— can create the kinds
of extraordinary places that
provide the maximum return
on capital and human investment,”
the two write.
Distribution centers have been
critical in maintaining the supply
chain for necessary goods in
the U.S. But with economic uncertainty
tied to public health
challenges, social distancing
within distribution centers
is crucial to ensure employee
safety and continued operation.
Cushman & Wakefield
released guidelines for distribution
centers to improve
social distancing, with tips
to stagger work shifts, reconfigure
common areas, and
discontinue large team meetings.
The report also outlined
three long-term changes to
balance worker health and
operational efficiency:
• Implement worker
temperature checks and
illness screening.
• Adjust layout of workspaces
inside warehouse
facilities to give employees
more horizontal and/or
vertical space to improve
social distancing.
• Explore accelerated adoption
of new technology
and innovative use of
existing technology.
The self-storage industry is
often insulated from large economic
disturbances, with many
tenants renting spaces for years,
despite the month-to-month
structure of leases. March, according
to statistics from Yardi
Matrix, was a positive month
for the sector, with demand improving
amid the fallout from
the COVID-19 crisis.
National rental rates
for a typical 10-foot-by-10-foot,
non-climate-controlled (NCC)
unit remained flat year-overyear,
at $116. Performance
varied greatly regionally in
the U.S., however, with Minneapolis
seeing rates drop by
7 percent for 10-by-10 NCC
units, while rates increased in
Las Vegas, San Francisco, and
Los Angeles.
Self-storage properties
under construction or in planning
represent 8.9 percent
of total inventory, which is a
large increase from the previous
year. But in light of recent
economic instability, Yardi
Matrix projects deliveries to
market will drop by 40 percent
in the next five years.
CIREMAGAZINE.COM COMMERCIAL INVESTMENT REAL ESTATE MAGAZINE 9