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I found myself in a conversation last week with a group of security consultants, and we were discussing: What technology and learnings can we glean on the impact of COVID-19 on the commercial/office real estate and technology market by looking at what happened after the 9/11 terrorist attacks? What stuck and went away?
It was fascinating.
Here are some of the increased security practices and products they said stuck:
All true and most of the examples are technology applications. I found one area the most interesting: government funds propping up the real estate and commercial office industry.
After 9/11, New York City and other densely populated cities saw companies and tenants relocate. For some, it was necessary to rebuild, but in general, the fear of another attack on a densely populated area drove some to leave and move to the suburbs. In some respect, although caused by different events, we see similarities to the behavior now: a horrific event happens, and fear causes people and companies to rethink how and where they work and live.
What we saw the government do after 9/11 is where things get interesting. After 9/11, the local, state, and federal government opened up their checkbooks and started funding improvement projects and construction in those markets to help with the rebuilding. They used attraction and retention grants and subsidy programs to spark and drive construction projects for new commercial office space, restaurants, multifamily housing, and retail.
You can start to imagine the same response happening to counter the impacts of the pandemic.
As more and more companies publicize their moves to work from home, enterprises downsize office space, and individuals migrate to the suburbs, there will be a direct path to local, state, and federal offices. Why? For example, in the United States of America, and there are parallels worldwide, the short answer is that the commercial real estate industry is too vital to the economy and even more important to many who work in politics and around Capitol Hill.
Real estate donates a lot to political candidates and has a depth of lobbyists. There is a long history of this being true.
The #3 industry that mints billionaires? Real Estate.
A large amount of state and local tax revenue comes from corporate taxes and real estate taxes.
They will not allow cities and the economy to be destroyed.
I believe it will impact the retrofit and aftermarket more than new construction. The fit-out and updating of buildings with technology that instills trust and safety will be where the money flows. It will come with a message about “wellness.” The results will be a boom for HVAC (indoor air quality) and Security (access control and visitor management).
Note: Although historically sectors within real estate, like multifamily, rebound quicker coming out of recessions, real estate as a whole responds quickly to significant events. And government subsidies play a big part in why.
I believe that will be the most significant relatable trend from 9/11 that we can apply to how we might see the markets respond as we come out of this pandemic.
Lee Odess is one of the most accomplished and knowledgeable Building Access experts in the world. He is the Founder of E+L+C, and former executive of Allegion, a billion-dollar manufacturer in the lock and access control industry. He also served as an Executive of Unikey, a start-up that pioneered the IoT/smart lock/smart physical access control industry and began his career as an Executive with the first cloud-based physical access control manufacturer, Brivo.
Currently, Lee is the founder of www.InsideAccessControl.com and www.InsideVisitorManagement.com, a media and blogging platform focused on the physical access control and visitor management industry, and Group337, a Growth Studio focused on business creation in the commercial real estate, proptech, and smart home markets for small to large companies in the security, access control, and IoT industry.