Attention: Cresa Ottawa COVID-19 Initiative
These are unprecedented times, and we want to help. Cresa Ottawa is offering to support your rent abatement discussion with your landlord. We're not seeking any compensation for this effort, nor are we suggesting that the landlord will simply gift any relief provided. We have several strategies we are employing to achieve this, and depending on your situation and that of your landlord, we expect to be able to arrange a period of lower rent, or no rent whatsoever. The rent relief may represent anywhere from between 1 and 3 months. We hope that our ability to work with your landlord to support you in this effort will contribute to your ability to get through this crisis smoothly. Let us assist with this effort so you can focus on other pressing matters.
Our team is fully engaged working out of their home offices and ready to assist. Please call us at 613 688 7200 before April 3rd or fill in the form below if you are interested, so we can discuss your situation.
We know things will get better in time.
Confronting the Crisis.
Cresa is the world’s most trusted occupier-centric commercial real estate firm. We exclusively represent commercial tenants and solely focus on finding the best office space that drives superior results for your business.
March 18, 2020
COVID-19: Implications for Businesses
COVID-19 is having a growing impact on the global economy. This article is intended to provide business leaders with a perspective on the evolving situation and implications for their companies. The outbreak is moving quickly, and some of the perspectives in this article may fall rapidly out of date. This article reflects our perspective as of March 18, 2020. We will update it regularly as the outbreak evolves.
In this post, we look at the two possible scenarios due to the pandemic and how it can affect the economy and your business in the future.
Scenario 1: What will happen if things get better - late recovery
In this scenario, due to the effective practices of social distancing and the combination of various decisions made by the governments and individuals, such as work-from-home and restricted travel policies, and national quarantines, growth in new case counts will be slowed. The virus proves to be seasonal, further limiting its spread. By the autumn of 2020, countries and corporates will have a better-developed playbook for responding, and slowly enable a continued economic activity.
Looking at the economic impact, consumer and business spending will continue to tank until the end of Q2 due to all the safety practices that we mentioned previously. Even though the pandemic is under control by the time, a recession caused by the sharp fall in consumer and business spending will occur. Consumers will stay home, businesses will lose revenue and lay off workers, and the unemployment rate will rise eventually.
Scenario 2: What will happen if things get worse - prolonged contraction
In this case, which we do not want to see, there is no proof showing that the virus is seasonal, leading to a long tail of cases throughout the rest of the year. Due to the weak adoption of safety practices such as social distancing and wearing masks, the pandemic will peak in the Americas and Europe from late April to May. Countries that have been successful in controlling the epidemic still have to implement public-health measures in place to prevent resurgence.
Most of the sectors, especially transportation, employment services, travel arrangements, and leisure and hospitality, will be affected by the pandemic as consumers cut spending throughout the year, and leads to lower demand. An increasing number of corporate layoffs and bankruptcies throughout 2020 will also take place. The worst-case scenario here is that major economies' GDP will contract significantly, approaching the global financial crisis of 2008.
How are companies currently responding to COVID-19?
Companies are responding to the outbreak as following:
- Increase hygiene and cleaning measures on-site
- Enable mobile and remote-working to an extent where it is a necessity
- Cancel all nonessential business travels until further notice
- Postpone or cancel upcoming conferences and trade shows
- Engage with local or federal public-health officers
- Advocate "social distancing"
- Reduce face-to-face client interaction
- Provide fact-based reports on issues to keep customers updated
Although companies are actively responding to the outbreak, with all the policies and adjustments made, it is still difficult to get the major actions right. Here are some of the challenges for many businesses:
Employee safety is important, but mechanisms are ineffective
When it comes to protecting their employees, large companies like Google and Facebook are hoping to prevent spreading the virus by implementing policies that restrict nonessential travel and cancel large meetings and events. They’re also changing how business is taken care of on a daily basis, advising some employees to work from home to prevent any contact with those who could have been exposed.
However, not every business reacts in the same way as large companies like mentioned, especially those that haven’t yet seen the coronavirus directly. Their policy-making is scattershot, and mechanisms are somehow ineffective. For example, some companies are adopting company-wide policies without thinking through the needs of each location and each employee segment.
Optimism about the return of demand is dangerous
Being optimistic about demand recovery is a real problem, especially for companies with liquidity shortages and those veering toward bankruptcy. Troubled organizations are more likely to believe in a faster recovery—or a shallower downturn. Facing up to the possibility of a deeper, a more protracted downturn is essential, since the options available now, before a recession sets in, maybe more palatable than those available later.
Short term is essential, but never lose focus on the Long Term
An immediate and effective response is, indeed, vital. But this does not mean that companies should lose track of their longer-term dimensions on many of those work streams. Recession may occur anytime, and the uncertainty from the outbreak is shifting industry structures. It is always important for companies to ensure everything is right in the present but also plan ahead.
Wondering how COVID-19 can impact your businesses's real estate? At this time you need an expert on your side who will guide you step by step through your options. Get in touch with one of our brokers today.