Spacelist’s COVID-19 Survey Results
Spacelist conducted a survey last week with hundreds of businesses that have leased space across Canada, including office (48%), industrial (20%), and retail (32%) properties.
Before we go any further, we wanted to thank everyone that participated and share the charities selected by three randomly chosen survey participants, each of which we’ll be donating $100 – Feed the Need In Durham, JumpStart, and Wounder Warriors Canada.
The survey focused on understanding the implications of COVID-19 on businesses leasing commercial space in the current situation, how they are responding today, implications for what actions they may take going forward, and also a pulse-check on when they feel we may start to get back to some new modified version of “normal.”
Stay-at-home and work-from-home have become new battle cries in our collective fight against COVID-19. In reality, though, how realistic of an expectation is this for commercial tenants? Based on survey responses, the majority of Retail (75%) and Industrial (62%) tenants are not able to work from home. Office tenants fare better, with work done from home possible for 68% of respondents.
With regard to staffing and operations, the picture is similarly bleak across all segments. While almost half of office tenants are operating with similar staffing as prior to COVID-19, Retail tenants have indicated 65% are shut down, with 38% of industrial tenants shut down. A small bright spot exists, however, with 4% of industrial tenants operating with more staff than before COVID-19.
Looking past COVID-19 to a time when business starts to return to normal, we surveyed both the “when” of the timing tenants think “normal” will return, as well as the implications on what space they might need. Retail tenants seem to be more optimistic than others, with 33% expecting a return to normal in the May/June timeframes vs. 25% for office/industrial thinking the same. On the whole, across all segments, 65% don’t think normal conditions will return until July/August or later.
On the more challenging front – in case the above haven’t created enough concern – within the next 6 months, 33% of lessors expect to break their leases in some way, with higher intentions in retail. While half of the respondents don’t expect any change, another 10% will end up looking for a smaller space, while 5% will start looking to sub-let their space.
While things are certainly a challenge for all in Canada at this time, we recognize the changes, now and to come, will continue to evolve. We anticipate doing an update with our tenant audience again in the coming months to keep track of the changing reality and sentiment for all.