The year 2020 has brought radical change to our city and many industries have drastically adapted the ways they do business and search for commercial space. In this blog, we sit down with broker Paul Andrews of Melvin Mark Brokerage Company to discuss what it’s like to be a broker in these unique times.
Q: Paul, this has been a unique year for sure. What is the biggest change you’ve seen in the brokerage world so far?
A: I think the biggest change has been the sort-of “pause button” that many clients have hit. Leasing a space is a long sales cycle and what we found was that most clients put everything on pause to face the current challenges from the COVID-19 pandemic. For example, one of my clients had plans to expand by 50% and sign a longer-term lease early, but is now on hold and does not need as much expansion space. So brokers have learned to simply reorganize their methods and roll with the punches; it’s been a bit of a psychological challenge because you really don’t know when things will ramp up and when things will go quiet.
Q: How about the biggest challenge?
A: Being a broker, you get a sense of the economic pulse of the city. You can follow the trends of what tenants are looking for and anticipate what may happen in the near future. But right now those trends have shifted. Overall, there’s been this economic change, but I think we will find a way forward that will make our city better for everyone. Brokers are now dealing with this long, intricate process of leasing space and it’s become quite a unique challenge.
Q: Have you seen interest in certain CRE sectors change over the past few months?
A: Well I specialize in the office sector but I know industrial distribution space has become more popular recently and retail has begun to level out as business owners figure out what exactly they need in a space.
What’s been really interesting on the office side is that some companies are interested in space but for a common purpose instead of just for an office purpose. For example, I am working on a deal with a group that would use the space for a few shared offices and conference rooms, so they would work virtually but be able to have a space to meet clients when they need it. We are still in the middle of seeing what tenants need. The long-running trend was “how many people can we fit into a space?” but now it’s more focused on “how will people use the space they have?”
Q: Do you have any advice for tenants looking for space or landlords looking for tenants?
A: Be realistic. My advice would be to figure out what your employees need and don’t make decisions based on what’s happening now. Most deals are three- to five-year terms and even before 2020, you would know there was going to be something different at the end of that lease term – you just didn’t know what. Well now that we’ve experienced a pandemic, you know it’s going to be very different, so the best thing to do is figure out your true priorities and how you want to do things.
For my landlord clients, it is being flexible and ready for anything. The market is changing and the short-term is challenging, but I believe in the long term there is reason to be optimistic.
Q: How have you changed your approach to brokerage?
A: My teammates Bryn Hokkanen and Ryan Becker and I have been reorganizing the way we do things. Even though there aren’t a whole lot of transactions being finalized, there’s been a lot of work to keep moving deals forward, so we’re trying to be a lot more proactive as well as trying to be patient and positive. In reality, the only constant is change. We’ve always been dealing with change, but we haven’t experienced it this uniquely, so being flexible has been important among brokers.
Q: What COVID-19 protocols have you seen businesses implementing for employees and/or customers?
A: Almost all of the businesses I’ve seen that still have employees and customers in a physical space are following CDC guidelines: they’re marking off six-foot distances, they’re installing plexiglass partitions, they’re implementing one-way arrows down narrow spaces, and they’re limiting the number of people allowed in common areas. However, many larger corporations have simply switched to an all-virtual workforce in order to avoid any risk of someone getting sick.
Q: What changes do you think we’ll see in the future?
A: I think commuting is an interesting example. One thing that has shifted is start times and end times during work days. I think we’ve proved we don’t all need to be commuting at exactly the same time every day, so working 7am-3pm or 10am-6pm can cut down on the radical amounts of rush hour traffic and also the way people get to and from work.
When we look at the future, it’s easy to react to the current environment and see a lot of problems, but I like to think long-term, and I think the future for Portland is bright. No one really knows what the future holds, so we might as well keep the outlook positive because there’s a sense of hope that it can be better. It will just take a lot of work from people to help in the community.
Q: Are brokers still hosting in-person property tours? And if so, what safety measures are they taking?
A: In-person tours are still happening, but now people are implementing virtual open houses and are compiling 3D tours of the available spaces as well. The tours I am involved in require masks, maintaining six feet of distance, propping open doors if possible – doing all of the things Melvin Mark has been doing to keep everyone safe.
Q: What is the most important lesson that brokers will learn from this?
A: To put it simply, “be ready for anything.” There are always going to be good times and bad times, but it’s a fallacy to think things are always stable and you know what’s going to happen. My advice would be to do what you can now and keep things moving. One phrase I’ve always loved is “learn to pull yourself out of the valleys.” Don’t get too down on yourself if something’s not working – just keep pushing forward, staying positive, and staying flexible.
Q: Do you think we’ll ever go back to “normal”?
A: I think we’ll go back to a normal life, but obviously it will be a life that has been affected by the repercussions of COVID-19. So there will definitely be a “normal” in the future, but it will be a new “normal.”