How is industrial
property management
adapting to COVID- 19?

 [00:00:00.09] [James Cook] What do owners of industrial buildings need to consider both today and in the future. We're talking industrial property management adapting to COVID- 19. This [00:00:10.0] is building places where we look at the world of commercial real estate through the eyes of the experts that study it every day. My name is James Cook. I research [00:00:20.0] real estate for J L L today. I'm talking with Debbie bone break.

[00:00:24.99] [Debbie Bonebrake] This is Debbie Bonebrake. I am responsible for the industrial property management platform [00:00:30.0] at JLL.

[00:00:31.95] [James Cook] I don't think folks might know how big that is like. Give us a sense of how many industrial properties that [00:00:40.0] were managing.

[00:00:40.95] [Debbie Bonebrake]

We are almost 400 million square feet. I think the last count was about three hundred eighty-six million square feet with a close to seventeen [00:00:50.0] hundred properties under management across the United States. Our clients are primarily institutional owners of industrial real estate and they typically [00:01:00.0] have portfolios that are multi market so they spanned the country

[James Cook] and so on a lot of cases this is going to be warehousing for retailers both online and bricks and mortar [James Cook]

[00:01:10.0] [Debbie Brakebone] bricks and mortar, e-commerce you name it and we're managing for these folks.

[00:01:14.88] [James Cook] We're in some unprecedented times right now. Are there any tools that you're offering to [00:01:20.0] help in this difficult time

[00:01:24.63] [Debbie Brakebone]

In industrial it's really more about collections and rent relief. And honestly we're doing great. [00:01:30.0] I think we're a lagging indicator so I don't see this manifesting itself until maybe May or June. But most of our tenants are paying their rent. Our [00:01:40.0] A.R. is at or exceeding where we were last year at this time. So we're not seeing any trends there. We are seeing some requests for [00:01:50.0] rent relief but it's what you would imagine it's the small business tenants less than 20000 square feet and it's less than 10 percent [00:02:00.0] of our tenant count. And so from a base perspective we're actually right now doing pretty well.

[00:02:08.25] [James Cook] So unlike a bricks and mortar store [00:02:10.0] or an office building where there's a lot of considerations about adapting to you know cleanliness about you know COVID-19 you don't [00:02:20.0] have that level of considerations at industrial buildings I would imagine.

[00:02:25.4] [Debbie Brakebone]

No because we're not managing buildings that generally speaking receive the general [00:02:30.0] public so they're not they're not common areas there's not.

[00:02:34.2] And that's as a general statement obviously we have some exceptions. But but as a general statement there aren't common areas aren't restrooms. [00:02:40.0] The tenant occupier of the space is responsible for what is in. So any kind of cleaning any kind of protocols that they put [00:02:50.0] in place for their employees are their own protocols. Our job is to manage walls out. So we're making sure our vendors are okay our property managers that they drive the properties [00:03:00.0] aren't going into the tenant spaces. We're providing our teams with masks. So our focus is making sure our teams are safe. We're tracking if there are any incidences because [00:03:10.0] we have that on it on a database and we then follow the protocols either of JLL or first. [00:03:15.9] the protocols of the client

[James Cook] have there been any unusual [00:03:20.0] you know circumstances that you didn't expect from all of this. You're like wow I didn't think we'd have to deal with this anything like that pop up.

[00:03:28.11] [Debbie Brakebone] You mean past just the pandemic [00:03:30.0] itself.

[00:03:31.68] [James Cook]

Well right. The unprecedented global pandemic might count as something I guess.

[00:03:37.28] [Debbie Brakebone]

Yeah I'm sorry. I was being a bit facetious. You [00:03:40.0] know it's been interesting to see how the universe of our most of our occupiers of our tenants or large corporations. They [00:03:50.0] have fairly good and extensive protocols and so it's been interesting to see how they've responded to it. But what we have done to make sure that we're responding [00:04:00.0] is we've put an entire protocol in place. We have a portal for all property managers every tool you can imagine is on that portal for responding to clients for responding to the client [00:04:10.0] and then more importantly the communication effort around clients tenants and our employees is very robust.

[00:04:19.62] [James Cook]

Another big [00:04:20.0] thing that we're talking about right now is around reentry so that's workers coming back to offices shoppers hopefully coming back to stores. Is that [00:04:30.0] even a real issue with industrial. Given the nature of the property.

[00:04:36.09] [Debbie Brakebone]

Mostly for us free entry is about the safety of our employees. [00:04:40.0] And you have to answer a lot of questions. How do you tour buildings if a client comes to town and are entering the building in the same car which would have been our history our history would be a client file then we [00:04:50.0] get a big car everybody piles into a van we go toward the buildings we go out to lunch we walk we climb on the roof we interact with the tenants all the things that obvious are a bit [00:05:00.0] challenging right now. So we're putting protocols around those kinds of things for our property maintenance guys our engineers how are they visiting the buildings. What [00:05:10.0] kind of safety measures do they need to apply and employ as they interact with our tenants and for our managers. Are you going to go toward the building go by yourself. [00:05:20.0] There's a there's a ton of stuff that we're addressing but it's mostly along those lines.

[00:05:24.87] [James Cook]

Is there going to be an opportunity in the future for us to use virtual tools to help [00:05:30.0] you know to our clients I mean maybe you send one individual on site with a camera that streams back to them or things like that.

[00:05:38.88] [Debbie Brakebone]

One of the things that we had to [00:05:40.0] deal with early on when we were very isolated when it when a tenant moves into a space we typically will meet the tenant at the space walk through put [00:05:50.0] together any kind of punch list for items that maybe still need to be completed. And it's quite a complex process. Our interactive process is probably a better word between the tenant and [00:06:00.0] the property manager because you're logging everything that you're seeing in the space. And so we have to figure out how to do that right. And so we had the tenant walk [00:06:10.0] at first make their lists and then maybe do a little bit of video and then the property manager would come in after that and do the same thing. And so these kinds [00:06:20.0] of collaborative efforts have already been in place for us and I think it's going to continue for sure.

[00:06:27.42] [James Cook]

Are you finding that slows things down it's gotta be [00:06:30.0] a little bit difficult to do that as opposed to being there in person, right?

[00:06:35.31] [Debbie Brakebone]

Yeah I mean I think everything that's going on right now is creating some [00:06:40.0] obstacles and slowing down the process. But you know safety first. So we have to be able to serve our clients. We have to be able to [00:06:50.0] most importantly protect our employees and keep them safe. So if the property managers are out there on the properties by themselves on the phone [00:07:00.0] with their maintenance engineer who may then go to the property to see something that needed to be addressed.

[00:07:06.09] And then of course we need to make sure our vendors are following an appropriate protocol as well.

[00:07:09.99] [James Cook]

In the coming months as we sort of hopefully transition into a next phase which you know means maybe we'll get to see each other in person again. You know crossing [00:07:20.0] my fingers it seems like it's going to be a pretty smooth transition for the industrial properties that you manage it seems like you're [00:07:30.0] all set to go.

[00:07:31.32] [Debbie Brakebone]

Well you know we hope so. We hope so. You asked a question earlier that that resonates with me which is what are you surprised by. And so every day [00:07:40.0] right. We're observing this and we're figuring it out and trying to anticipate so that we aren't surprised but I'm sure we're going to run into some obstacles and and some things that make [00:07:50.0] us pause. But we're going to make sure our property managers are educated we're going to be educated ourselves. So we're taking a day at a time one foot in front of the other.

[00:07:59.55] [James Cook]

So Debbie [00:08:00.0] thank you so much for joining me today. It's been a fascinating conversation.

[00:08:04.35] [Debbie Brakebone]

Thanks James it's always great to be able to talk about what we're doing and I appreciate the opportunity

[00:08:10.0] [James Cook] if you had a question about today's episode or perhaps a topic you'd like us to tackle in the future you can tell us about it by calling the podcast hotline and we may use [00:08:20.0] your voice in an upcoming show. Give us a call at 6 0 2 6 3 3 4 0 6 1 and be sure to tell us your name [00:08:30.0] and where you're calling from. You can be sure to never miss an episode of building places by subscribing you can pull up building places on your iPhone podcast [00:08:40.0] app on Spotify or wherever it is you get your podcasts. And if you'd like to learn more about retail real estate you can listen to our sister show. It's called [00:08:50.0] where we buy. It's a show where we talk with retail experts and visit the places where we buy. And for the latest research about commercial real estate you can [00:09:00.0] visit J L L dot com.