For more information, email [email protected].

WASHINGTON (August 26, 2021) – The pandemic and growing awareness of racial justice issues in the U.S. has had a profound impact on real estate operations, according to a new report from the Urban Land Institute. ULI is a global, member-driven organization comprising more than 45,000 real estate and urban development professionals dedicated to advancing the Institute’s mission of shaping the future of the built environment for transformative impact in communities worldwide.

“The COVID-19 pandemic is creating fundamental shifts in real estate. In 2020, the industry pivoted quickly to respond to the pandemic. We wanted to learn more about what owners and managers did, and what they are expecting going forward,” said Rachel MacCleery, senior vice president at ULI’s Building Healthy Places Initiative. “Tenants and building occupants are paying attention to how buildings impact health and social equity in unprecedented ways. This survey provides an important benchmark for real estate leaders seeking insights on the actions of their peers throughout the industry.”

Buffeted by a pandemic and growing awareness of racial justice issues, 2020 was an impactful year for real estate leaders. ULI surveyed nearly 300 real estate developers, investors, building owners, and property managers nationwide over March and April 2021 to analyze impacts to the real estate industry across three categories: building operations, finances, and human impacts. The survey identified changes that occurred at both the building level and the company level. It also yielded insights about which of those changes may be temporary—and which may be here to stay.

Key findings from the report, A Transformative Year: Impacts of 2020 on Real Estate, were:

Building, Space, and Occupancy Impacts

• The pandemic accelerated healthy building trends. Building managers and operators pivoted quickly to respond to the pandemic.
• Prevalent measures included advanced filtration systems with MERV-13 ratings, HVAC systems with increased air flow, mask wearing, temperature checks, and enhanced communication strategies.
• Survey respondents forecast that many health-oriented building changes are here to stay. Fifty-three percent of respondents believe that changes to equipment, like improved HVAC systems, will be permanent.
• Other measures are likely to be temporary. Space layout and occupancy control measures are generally expected to last until the pandemic is over.
• Fifty-eight percent of respondents said that they already had at least one health and wellness building certification or were likely to pursue one.
• About one-quarter of respondents reported barriers to implementing COVID-19 health and safety protocols in their buildings. The challenges most commonly cited by respondents were a lack of funding and a lack of public health guidance from local or federal officials.
• The industry wanted more guidance from the government and other authorities on how to navigate an unprecedented situation.

Financial Impacts

• A majority of respondents experienced an increase in both operational costs and capital budget.
• Amid financial challenges, industry leaders prioritized collaboration, communication, and flexibility. About 80 percent of respondents offered rent concessions, adjustments, amortization, or lease amendments.
• More than half of respondents expect to continue to provide rent or lease adjustments until the pandemic is over, if not longer.

Human Impacts

• Real estate leaders worked with tenants, employees, and communities to respond to both the pandemic and the protests against racial injustice.
• Eighty-four percent of respondents increased communication with tenants regarding health and safety measures; 64 percent did so regarding mental health resources.
• Many companies responded to the country’s racial reckoning by adopting enhanced diversity, equity, and inclusion (DEI) measures. The three most common responses were: increasing dialogue with staff; donating time or resources to local organizations that support marginalized communities; and engaging in conversation with local organizations in communities affected by development projects.

The full A Transformative Year: Impacts of 2020 on Real Estate report is available on ULI’s Knowledge Finder.

For more information, contact [email protected].

About the Urban Land Institute

The Urban Land Institute (ULI) is a nonprofit education and research institute supported by its members. Its mission is to shape the future of the built environment for transformative impact in communities worldwide. Established in 1936, the Institute has more than 45,000 members worldwide representing all aspects of land use and development disciplines. For more information on ULI, please visit uli.org or follow us on Twitter, Facebook, LinkedIn, and Instagram.