Last week it seemed like every day brought a new surprise and challenge to the US government and economy. There have been numerous articles about what to do about the highly contagious nature of COVID-19 and I think we may see even more surprises come our way this week.
One new challenge that I think is highly likely is that we have a complete shutdown/quarantine of public gatherings, bars, restaurants, etc. This focus on “social distancing” has a pretty compelling analog that took place during the 1918 Spanish Flu outbreak. Check out how Philadelphia fared after a massive public gathering versus St. Louis, where all public gatherings were halted. Hint, social distancing works.
As we look forward, Wuhan’s experience (where quarantines seem to be working) also indicates some hope that if the spread of the virus is slowed, economic recovery can move quickly (but not uniformly).
The Harvard Business Review published an article that has some relevant things for us to think about as we frame our thoughts relating to COVID-19. The lead author, Martin Reeves, puts forth 12 thoughtful nuggets to consider. I have distilled them into the following concepts to explore as we navigate our way through the next weeks and manage the fear that has materialized:
- Look ahead and reframe: How will the residential markets be changed by this virus? Thinking practically, residential development is a longer-term investment and process (that is not turned on and off week-to-week) and shelter is a basic necessity.
- Bottoms-up and top-down thinking: We are having better communication than ever with our strategic thinkers and experts on-the-ground. Consider ways your company can better connect and align key players to zero in and decode the biggest challenges of today.
- Reallocate resources: Check on your staff and see where coworkers are overextended and those that can offer coverage, especially for parents dealing with their kids being out of school.
- Use social media to communicate: As news changes, your team, subs, and clients need to hear from you. Make sure communication is clear and frequent.
- Prepare to recover sooner than you think (and adapt the recovery by asset class and location): As you can see in the second article, China is already seeing a rebound six weeks into the epidemic. For the US, I think we may see Las Vegas (service) and Houston (energy), for example, rebound differently than say, Charlotte or Dallas.
- Innovate around new needs and consumption behavior: Will we go to all Zoom/GoTo meetings? Will health and wellness be the single focus for residential and hotels? Will retailers go more towards a “drive-in” delivery system? Will using the internet to buy a home become an even bigger part of the process? There are some compelling changes related to the consumer that we have to get in front of.
A heartfelt thank you to my friend George Casey for sharing these articles.
We are all a bit confused and worried but don’t forget to be empathic and share kindness. It is one of the best ways to overcome the fear and frustration that this virus has thrust upon us. Note the professional athletes who have committed huge sums of money for the arena workers to bridge the gap while the season is on hiatus or the outbreak of singing in various Italian cities during quarantine so that people living alone could hear that there was a community, even if one could not see it. This stuff is more resilient than a terrible virus because it gives us hope and something to hold onto.
We will keep you apprised of news, ideas, and changing trends in the economy and housing market. In the meantime, stay safe, eat well, exercise, and be close to your family.