Written by: Tom Bannar | Vice President, Construction & Real Estate Practice | Johnson, Kendall & Johnson, Inc.
As we grapple with the tail end of COVID and the promise of a vaccine in the coming months, every industry across the board will be faced with changing the way they do business. The Commercial Real Estate industry, especially in urban landscapes where office towers historically reigned supreme, will forever be altered. Organizations, such as our own at Johnson, Kendall & Johnson and many of our clients with office spaces in downtown metropolitan areas have acclimated to the fact that even in a post-pandemic world, working remotely is not only just as productive, but immensely more economical.
In cities like Philadelphia, the need of an increase in housing was clear pre-COVID due to reasons such as the onslaught of professionals escaping the high rents of Manhattan. However, what will now be in need is the combination of developments that include flexible housing, significant working spaces and attractive entertainment. Prior to COVID, only 2.5% of the American workforce teleworked. A survey conducted by Stanford University and the University of Chicago of 1,750 executives at various firms across the country expect 30% of their workforce to telework at least once a week post pandemic, triple that of the 10% that did pre-pandemic.
Thus, the need for commercial developments that incorporate both housing and sophisticated working spaces for professionals is the future of urban development, not the high office rents organizations are customary to paying in downtown urban hot-spots.
At Johnson, Kendall & Johnson, our Commercial Real Estate Team has continued to acclimate to this growing trend from an Insurance and Risk Management perspective. Developers are now faced with a different approach to mitigating their risk when developing properties that are multi-dimensional in their offerings. Risk Management strategies must be tailored around residential, office, entertainment and hospitality exposures moving forward, and the creative methods of reducing the overall costs of those bundled risks for developers are vital to the future of urban developments.
For questions on your approach to Insurance and Risk Management development, please feel free to contact me:
Vice President, Construction & Real Estate Practice
O: (215) 579-6479
C: (215) 589-3401