COVID-19: Impact on the Market Survey Results

Fall 2020 In the first and second quarter of 2020, as the COVID-19 pandemic reached the U.S. and it became clear that the impacts would reach deep into our professional and personal lives, FitzGerald’s design team turned our attention to analyzing the ways in which multifamily living could be changed for the long-term. We surveyed more than 125 residents of high-density multifamily , largely in the Chicagoland area, on their experiences during stay-at- orders and work-from-home protocols. Later, we posed questions to more than 35 property managers, whose job it is to oversee and manage the type of multifamily properties we design (and those previously surveyed residents live within) on what pandemic impacts they were experiencing–from interactions with their residents to the changes they’ve seen in leasing rates and practices.

What follows is a summary of the results, key ideas and themes from these surveys, interspersed with insights from our experts on how current leasing trends and resident sentiments may forever change the way we design multifamily buildings, how managers oversee them, and how residents experience them. Demand/Desire

Lease Activity

60% of buildings report a drop in new lease volume, while lease renewals remain flat.

NEW LEASES LEASE RENEWALS

REDUCED 60% 33% REDUCED

SAME 23% 37% SAME

INCREASED 17% 30% INCREASED

One benefit to renting an apartment is the ability to inherently think in the short-term and, therefore, renters can be reactionary to the market conditions and pressures–whether that means to change buildings or stay in place. Through the pandemic, the challenges of living in multifamily properties have been counterbalanced by the discomfort of embarking upon an apartment search and moving experience to seek a new living arrangement.

Mike DeRouin, President Demand/Desire

Resident Sentiment: Looking Forward

Has your desire to live in a high-density apartment changed as a result of the COVID-19 pandemic?

REDUCED DESIRE 46%

SAME DESIRE 53%

INCREASED DESIRE 1%

Silver Lining Property managers of really large buildings (250+) reported renewals are more stable than their smaller competitors. Demand/Desire

Reflections on Leasing Protocols

Leasing protocols have pivoted to minimize in-person showings -- now defaulting to online self-guided, 3D virtual, and similar immersive experiences made possible by tools like MatterPort. Beyond the need to provide “no-contact” property tours for safety, convenience is also a factor that will likely persist. A virtual tour protocol can make it easier and faster for both leasing staff and prospective tenants to rent an apartment.

COMMON SPACE

LEASING OFFICE

If virtual leasing is here to stay, rethinking of the leasing office environment also may be necessary. One consideration may be providing for a couple of private offices, as well as back- of- space for the building staff that can be secured at night. Meanwhile, an open lounge and conference suite could be shared by leasing and other building staff. Adjacent space could include a large communal table where prospective tenants could explore unit options digitally on iPads before meeting with a leasing agent.

Kristen Larkin, Interior Design Director Satisfaction/Comfort

Resident Sentiment: Units

87% of residents reported working from home during the pandemic.

25% 62% ALREADY WORKED BEGAN WORKING FROM HOME AND FROM HOME DURING CONTINUED DURING PANDEMIC PANDEMIC

35% of residents surveyed felt they did not have adequate space to work from home in their current unit. 35% 65% UNSATISFIED SATISFIED WITH WFH WITH WFH Satisfaction/Comfort

Reflections on the Work-from-Home Trend

In response to residents citing their #1 concern about work-from-home as “lack of space,” we, as designers, must think creatively about both floorplans and inclusion of multi-function space within units.

FitzGerald’s recent design innovation series titled “Future of Shared Spaces” explored what tenants might be seeking in their future apartments. With an eye on an increase in work-from-home, one element we “included” was a convertible desk, where the could open up to reveal a built-in workspace. This would allow tenants to “close-up shop” at the end of the day, so as not to blur the line between work and home. Additionally, we provided a separate workspace niche in the that could be separated by drapery. The two solutions combined allow for two residents sharing one apartment to each have their own dedicated workspace.

The work-from-home trend, while initially imposed upon us as a critical safety measure, has been embraced by many as the way of the future–for reasons including convenience, flexibility, productivity, and simply “preference.” Work-from-home is here to stay and will likely never return to the pre-pandemic 25%. Therefore, it will be critical that multifamily buildings support tenant’s work needs through improvements to the units, as well as supportive amenty spaces.

Kristen Larkin, Interior Design Director Satisfaction/Comfort

Resident Sentiment: Outdoor Space & Access to Fresh Air

2/3 of residents said they have easy access to the outdoors. The majority of residents surveyed attribute this to having a private .

1/3 of residents said they do not have easy access to the outdoors.

The two-bedroom unit in our “Future of Shared Spaces” included a 100-square-foot balcony that could be furnished for lounge and relaxation, while also including power outlets for the possibility of working outdoors.

In the post-pandemic future, we’ll all expect to have easy access to the outdoors. Multifamily residential buildings that provide this much-needed amenity will have a competitive edge on their peers who don’t. Indeed, the demand for on residential units will persist long-term.

Steven McFadden, Principal Satisfaction/Comfort

Property Management Approach: Lobby &

Lobby

While multifamily building lobbies often serve as community space, and may see a reduction in use during COVID, they are also still the “face” of the building and the site of “first impressions.” Lobbies must convey a building’s brand, commitment to resident satisfaction, and can also showcase the building’s approach to implementing necessary safety protocols during COVID.

Elevators

During the pandemic, building elevators are concerning potential pinch-points. Building protocols around their use are now scrutinized as part of the resident experience. In response, buildings are implementing approaches that are both safe and convenient, such as displaying wait-time, limiting capacity in cars, implementing touchless controls, and designating areas for waiting, with social distancing enforced. It is likely that increased attention to elevators and elevator lobbies will persist even long after the COVID-19 era. Satisfaction/Comfort

Resident Sentiment: Building Amenities

Which amenities, from which you are currently restricted, do you miss the most?

69% FITNESS 48% OUTDOOR AMENITIES 46% POOL

19% 21% LOUNGE BUSINESS CENTER

The results of this survey will inform how we design building amenities and how much space is allocated to each use. In the future, it is likely that more space will be dedicated to fitness and recreation. As we think creatively about how to respond to resident needs, one possible solution would be to blend desired space types across indoor and outdoor areas, for example, by integrating large operable glass –or a –allowing an interior fitness space to open to an exterior where outdoor activities or classes can be hosted.

Mike Breclaw, Principal Community/Resident Relations

Property Management Approach: Tenant Engagement

63% of property managers with an on-site presence reported they had pivoted to offering virtual programming –in place of in-person events–for tenants.

While multifamily communities have been diversifying and specializing their program offerings for a long time, and many have managed to transition activities to virtual settings, as in-person activities eventually resume, there will likely be a shift in how programs are delivered for the long-term.

We may expect to see a re-calibrating of the size and type of common spaces in the building. Perhaps amenity spaces will change from one large open lounge to multiple various-size spaces that can accommodate smaller-group offerings organized around themes and resident interests, rather than a single large amenity space that gets used for large parties only occasionally.

Kristen Larkin, Interior Design Director Community/Resident Relations

Property Management Approach: Deliveries

44% of buildings said they need more space to handle volume of deliveries. 56% of buildings said they need more staff to handle volume of deliveries.

Package delivery is another consideration that has existed in multifamily design all along, but pandemic stay-at-home orders have reportedly increased the volume of packages, in particular fresh and refrigerated food. Combining this with increased service amenities in these buildings, we believe buildings may opt to dedicate staff to package distribution, to on- drop zones, or directly into units.

There are many ways designers can help building owners and managers navigate the need for more space for package storage, or more efficient back-of-house space for managing deliveries. In addition to Lobby Drop-Zones and “futuristic” ideas, like including Drone Delivery Pads on balconies, traditional design solutions, such as expanding package , adding lockers, and/ or generally improving adjacencies for ease of resident access to packages, may alleviate the pain point in the immediate future.

Rick Whitney, Vice President Community/Resident Relations

Other Considerations

The average person’s time spent at home has increased 2-3X since before COVID-19.

PRE COVID: NOW: 1O-11 HOURS 16-24 HOURS AVERAGE STAY AT HOME AVERAGE STAY AT HOME

100% of buildings surveyed said cleaning protocols had significantly improved in response to COVID.

In consideration of both the work-from-home trend and the improved/increased cleaning protocols put into place by property managers, the need for long-lasting, commercial-grade finishes throughout both common areas and units will likely be emphasized going forward. As designers, we can offer unique solutions that meet this durability need, while also accommodating aesthetic goals. About Us

FitzGerald fosters a diverse community of talented people invested in the creation of exemplary environments and that betters our world. We enthusiastically encourage a balance between work, play, and service. Our clients appreciate that our is a community of experts, leaders, and good communicators that enthusiastically contribute their design talents and technical expertise toward meaningful work together.

912 West Lake Street Chicago, Illinois 60607 @FitzArch

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