D.C.'s Real Estate Jobs and COVID: Where Does Commercial Leasing and Property Management Stand?
Real estate jobs are a staple in any major metropolitan area, but they are also vulnerable to market shifts and economic conditions. National trends indicate real estate, rental, and leasing jobs have been on the uptick, adding 4,000 jobs between February 2018 and February 2019 despite a housing slowdown in 2018.
Then the COVID-19 pandemic arrived.
Let us take a look at how the D.C. commercial real estate (CRE) job sector performed before, during, and what it will likely look like after the health crisis is over.
Historically, the D.C. CRE market relied on the federal government for leases. Since the 2008 recession, the market has diversified as government demand and spending decreased. Today, many businesses call the D.C. metro area home, including Amazon. Amazon partnered with JBG Smith to develop and lease property in Northern Virginia and is in the process of massive CRE development plans consisting of office and retail space.
D.C.-based property investment is a coveted market. The result is consistency in the property management and commercial leasing sub-sectors. Going forward, industry experts anticipate CRE jobs will experience a transformation due to pandemic-related effects, along with a general need to modernize.
During the pandemic
During the pandemic, businesses delayed their moves and other real estate decisions. In the residential space, while tenants in apartment buildings largely paid their rent and occupancy rates remained steady, a shift to month-to-month leases added some uncertainty.
On the operational front, once emergency orders in D.C., Maryland, and Virginia were issued, leasing agents and property managers shifted to remote work. Deemed an essential industry, real estate companies pivoted and adapted their operational procedures. Agents and managers marketed properties through virtual tours, image galleries, panoramic tours, video walkthroughs, and interactive floor plans to limit in-person interactions.
In a blog post, Baltimore-based Bay Property Management Group says industry professionals agree remote work concepts in property management are here to stay.
Going forward, how might this impact CRE sector jobs?
Looking toward the future
In January, the Washington Business Journal reported the majority of employers in the area stalled office returns. Most have no plans to add or reduce office space over the next year, 13 percent planned to decrease, and a mere 6 percent planned to grow their real estate footprint in the next 12 months. The good news is most plan to bring back in-person operations—with modifications. Of employers surveyed, 56 percent said teleworking one to two days a week will "likely" be the "new normal." On the federal horizon, it's possible beyond the pandemic the government realizes they can feasibly operate with less square footage.
If any of this comes to pass, it will directly impact CRE. Furthermore, how commercial space is utilized will largely depend on individual companies and how they fared through the pandemic, especially since physical distancing has "directly changed the way people inhabit and interact with physical space," according to a McKinsey report.
Operational shifts can directly impact jobs. The U.S. Bureau of Labor Statistics already predicts a 0 percent job growth through 2029 in the property real estate and community association category, although the wider D.C. region is reported to be a metro area with the highest employment level and concentration of jobs in this sector. Deloitte anticipates a substantial segment of CRE jobs will be largely digital in the future as self-service becomes a trend in both residential and commercial real estate.
- AI, robots, and other technologies designed to perform the industry's mundane tasks will replace jobs.
- Rent collections, lease preparations, and other related tasks will be digitally transformed.
- Most CRE tasks will go virtual or involve a combination of cloud and automated technologies.
As jobs are eliminated, new opportunities will emerge for individuals willing to pivot and embrace technology. Aside from tech-based positions, real estate leaders may shift from their reliance on economic trends or customer-survey-driven approaches, states McKinsey. Instead, companies may look to "psychologists, sociologists, futurists, and technologists," for answers. If so, this opens up a new realm of industry-related job opportunities.
CRE was already set for digital transformation, but the pandemic no doubt accelerated it.
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