COVID 1 Year Later: Commercial Realtors Pivot As More Work From Home
This story is part of a special episode of Sound Ideas airing March 12, marking the one-year anniversary of COVID's arrival in McLean County. Find more stories in the series.
The pandemic has caused major shifts in real estate. Many businesses closed, some of them permanently. Some companies sent employees home to work. Some of those workers might stay there when the pandemic is over.
Commercial Realtors have had to adjust to a changing landscape, one that could reshape Bloomington-Normal in multiple ways.
Ed Neaves is the managing broker for Berkshire Hathaway Central Illinois Realtors. He manages six shopping centers in Bloomington-Normal. Last fall during the height of the pandemic, Neaves took inventory of all the commercial properties available in the Twin Cities. He counted 320.
“That’s a bunch,” said Neaves, adding he typically sees around 200 at a given time.
Neaves said some businesses are low-key about moving. All they do is put a for sale sign in the window.
“They don’t want the impression that we’re downsizing because of economics, which is what people have a tendency to start spreading when in fact they are downsizing for efficiency,” Neaves said.
Neaves said those real estate efficiencies started before COVID-19; the pandemic just accelerated them.
His firm's parent company, Tentac Enterprises, shrunk its own footprint at its corporate offices in Bloomington two years ago. That created more space for other retail and office tenants.
Neaves said the real estate market is still strong in Bloomington-Normal. He he expects the work-from-home dynamic will have a much bigger impact in larger cities like Chicago where crowded offices may become a thing of this past.
Neaves said commercial properties are selling, but the market has still taken a hit.
“It depends on the property, but you would be accurate to say the commercial market is getting less rental than it was pre-COVID,” he said.
Neaves said managers have to be more proactive to keep their property looking good, whether that's a new paint job or new signage to keep tenants from looking elsewhere.
“(It’s) just to make it look better, because the old marketing (line) is if you still market it when times are tough, when they get better, you’ll just have a bigger market share,” Neaves said.
If working from home becomes the new norm for a growing number of businesses, some offices may need to find new uses. That could significantly change how communities look in the future.
Raymond Lai, executive director of the McLean County Regional Planning Commission, said that challenge also presents an opportunity to reimagine how communities plan and develop.
If more people are working from home, Lai said offices won't need all those big parking lots. He said there could be more efficient ways to use that space.
“So we make it a bus transfer stop or for other uses that really could see that open space or better circulation for drive-thru type businesses,” Lai said.
Lai said some retail shops could also downsize as they rely more on online business, adding the benefit of more available commercial real estate is there's less need for urban sprawl. But he said it will take creative developers to find new uses for old buildings.
“The good thing is people may have more choices now. They don’t necessarily have to go into those open green fields to develop,” Lai said. “Maybe there’s some creative ideas to reuse existing buildings.”
Lai said this will all play out over many years, even decades.
And, some of that unused office space may find a new purpose for people who are working from home.
Patrick Hoban is CEO of the Bloomington-Normal Economic Development Council. Hoban said empty offices could take the place of coffee shops to help remote workers meet and collaborate.
“It’s great to work from home, but at some point you still need to go to a shared space for that one-on-one contact and you have conferences,” Hoban said.
The EDC mostly focuses on recruiting new business to the county. But Hoban said under the work-from-home model, the EDC also wants to reach out to people who can work from anywhere.
“When people started realizing how little they actually have to go to the office and people can be just as effective, it makes an area like Bloomington-Normal much more attractive,” Hoban said.
The EDC plans to boost its BN Advantage campaign through social media and direct mail to market Bloomington-Normal to remote workers, college graduates who moved away, college students who might stay and those who live in rural areas. Hoban said the community can sell its schools, quality of life and cost of living compared to bigger cities.
Hoban said long term, the EDC plans to lean into the Zoom Town concept. He said the EDC would like to hold recruiting events in other cities when the pandemic is over. But Hoban said for now, the council is focused on finding workers for prospective companies that could locate in McLean County. He said if the county can expand manufacturing and distribution base, the employees will come.
“I think it will be a secondary effect of how well BNAdvantage.com does,” Hoban said. “As long as we are marketing the romance side of living in Bloomington-Normal as opposed to the business side, we are going to continue to attract and retain people,” Hoban said.
Hoban said if the EDC attracted more remote workers to Bloomington-Normal now, there wouldn't enough housing stock here to support them.
Realtor Ed Neaves said homes in Bloomington-Normal are selling within days if not hours. He said limited inventory, higher demand and low interest rates make this a booming housing market.
State Farm declined WGLT's request for an interview to discuss its real estate strategy in light of COVID. In a statement the insurer said a vast majority of its 14,000 McLean County employees continue to work from home.
State Farm said it plans to gradually return employees to its Bloomington offices throughout the year and to its hubs in Atlanta, Dallas and Phoenix, though some workers at its operations centers around the country will no longer need to report to work.
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