What We Learned From COVID: REIT in a Post-Pandemic World

On April 7th, I participated in a panel of senior executives from five different real estate sectors during New York University’s Schack Institute's 25th Annual REIT Symposium. The topic at hand was “leading through a storm,” and we shared our thoughts on the impact COVID-19 had, and is still having, on the companies we steward. 

NYU’s School of Professional Studies has an 85-year history of educating students to become industry leaders. Normally, students graduating would be excited about the possibility of putting their master’s degree to work and starting their career, but COVID has put up roadblocks. In a recent Indeed survey of more than 1,000 students graduating in 2021, 54% said the coronavirus' impact on the labor market has made them feel less confident in finding work after they graduate, while 33% said they feel they will struggle to get into the industry for which they have prepared. 

There is a silver lining for students. We gained a great deal of knowledge navigating this experience. We are more agile and positioned to pivot faster, which enables us to bring promising talent into the company, regardless of future disruptions, and offer an environment where they can use their education to thrive professionally.

The Value of Digital Transformation 

While every leader agrees that pandemic lessons better prepare their industry for future uncertainties, each company experienced unique challenges. Joe Coradino is Chairman and CEO at Pennsylvania Real Estate Investment Trust, which primarily owns and operates retail shopping malls. Lockdowns and social distancing completely shut down malls for four months. Marguerite Nader is President and CEO of Equity LifeStyle Properties, Inc. Her company helps people put manufactured homes, RVs and boats into locations near retirement and vacation destinations. After an initial dip in revenue related to shutting down RV parks, their business roared back and, with proper safety measures in place, 90% of their employees kept their jobs.

For CoreSite, an essential business which actually grew employment, COVID illustrated the importance for companies to modernize their digital infrastructure so they can operate more efficiently, interact with customers digitally, enable remote operations (creating the customer experience we so often hear about) and increasingly support employees working from home. 

Customers who had already adopted hybrid and multi-cloud architectures were able to very rapidly change how they digitally operate. Many of them increased workloads critical to digital business. COVID also compelled many companies to seek acceleration of digital transformation, and therefore increased demand for comprehensive data center, cloud access and interconnection solutions. 

The Importance of Discipline and Agility

The biggest challenge for the team at CoreSite was the rapid switch to stringent and constantly evolving safety protocols for datacenter operations personnel who were required to be on-site to ensure continuous operations, and the parallel switch to working from home for professional employees and performing data center activities remotely. Our business is built on providing our customers with exceptional reliability and security. Thanks to the hard work and dedication of our employees, I’m proud to say that we implemented our business continuity plans, achieved 99.999996% uptime, completed 3,500+ cross connects and delivered 96% move-in requests within the customer’s desired timelines.

I believe that two pillars in CoreSite’s guiding principles – commitment to each other and commitment to the customer – were catalysts in achieving our high level of operational excellence. Managers committed to learning best practices for managing remote teams. Datacenter colleagues were faithful to our operational excellence procedures and training, adapted quickly to safety protocols, and stepped up when the broader impacts of COVID occasionally affected staff availability. We allowed our customers regular site access, while also enabling effective remote operations, and kept them fully informed with frequent communication.

Had we not been intentional in previous years to build the company culture around powerful and enduring principles, we would not have been able to deliver what our customers needed. We actually saw customer satisfaction scores, reflected through real-time surveys, increase compared to prior years.

The Way Forward for Employees and Customers

It is critical for all of our company leaders to use what we learned to shape future operations. Working remotely is not going away. Surveys generally predict that hybrid remote work could continue, with 20 to 25% of workers in advanced economies working from home three to five days a week.*

We’re looking at a hybrid work model, which will promote both social connection and collaboration at our facilities as well as convenient, more time-efficient, working from home. And we will continue to encourage our employees to disconnect, take care of themselves and their families, and limit their at home work day, just as we did this past year.

As the discussion was winding down, moderator Scott Robinson said, “I have students doing research on 5G and edge computing. What is CoreSite doing looking forward, relevant to edge and 5G?” I answered by saying that we continue to expand our campuses to handle the increasing volume of data we are seeing, especially in major metro areas, to enable low-latency edge use cases such as 5G and the internet of things. Interconnection is critical as well. We will continue working with customers and other solution providers to make it easier for companies to share data, turn up and down on a moment’s notice, and to create a digital infrastructure stack enabling them to reach their business objectives and have an agile platform for whatever the future brings.

We have a video edited to provide my remarks, linked here.

You also can watch the entire presentation to get the thoughts of the panelists, linked here. 

• Joseph Coradino, Chairman & CEO, Pennsylvania Real Estate Investment Trust
• Jeff Fisher, Chairman of the Board, CEO and President, Chatham Lodging Trust
• Marguerite Nader, President & CEO, Equity LifeStyle Properties, Inc.
• Martin E. “HAP” Stein, Jr., Executive Chairman, Regency Centers

And I thank Scott Robinson, Clinical Assistant Professor Program Coordinator, Finance & Investment Director, REIT Center NYU SPS Schack Institute of Real Estate, for hosting and inviting me to take part.  

*www.mckinsey.com/featured-insights/future-of-work/the-future-of-work-after-covid-19