Delta Variant Shifts Ground Under Property Managers Again, But Constant Change Is Their Normal Now

Commercial property managers navigated numerous obstacles over the past 18 months, balancing shutdowns, safety mandates and the trepidatious reopening of public space. With the arrival of the delta variant and renewed concern and confusion over new rules of safety and sharing space, it seems their work is suddenly in flux once again.

But in discussions with four property managers across the country and across residential and commercial property types, it appears that the delta variant hasn’t upset operations as much as thrown a new curve during a time when everyone has become used to change.

“New normal” has been perhaps one of the most overused phrases of the coronavirus pandemic, but Envision Real Estate & Management Co. principal Jim Vocos said the oft-repeated mantra means that most firms, if not expecting rapid shifts to standard operating procedure or a new variant, are already prepared and experienced enough to adapt to the kinds of changes being wrought by the delta variant. 

“A new normal has certainly taken shape for my industry,” said Vocos, who is based in Chicago, and is also the president of the local chapter of the Institute of Real Estate Management. “For instance, remote working is no longer the exception; it is part of the overall operation structure. I now employ help from out of state. This would not have been even a thought prior to the pandemic.”

Amid the delays in back-to-the-office plans by major corporations and tenants, and the reimplementation of mask mandates, Vocos said the biggest challenge impacting his firm and others has been the uncertainty. 

Existing labor market challenges, especially the shortage of workers willing to take jobs on the lower end of the pay spectrum, have been amplified by the delta variant. Vocos said hiring new personnel, including janitorial and office administration staff, has been difficult. 

Caroline Gadaleta, the regional managing director for property management for JLL in the New York/Tri-State region, which encompasses roughly 20.5M SF of office space, said she’s having to readjust expectations of when employees will return. Many firms had anchored their return-to-office calendars around Labor Day, but the delta variant has set those plans adrift, with many moving their internal goal posts back a few months and now turning their attention toward proof of vaccination and vaccine mandates. 

While it’s challenging to have schedules in flux and commercial corridors still mostly empty — “For us, getting people back to the buildings is really important, we want to have full buildings again,” Gadaleta said — it hasn't been a difficult adjustment. Her team, already experienced after 18 months in new cleaning, security and operations plans, was concerned about another surge and had planned for something like this to happen. Not moving too quickly paid off. 

“We haven’t changed much,” Gadaleta said. “Maybe one building in our entire portfolio where masks weren’t being used at work at all reverted back. In every other building, masks were worn in common areas and tenant spaces, and most ask unvaccinated to wear masks.”

Many of the changes forced upon the industry during the pandemic, like a rapid shift to virtual showings, have become a more standard part of leasing strategies, all mitigating in-person interaction, Vocos said. In addition, personal protection equipment is much more readily available for building staff now than it was in 2020. Switching back to more diligent social distancing and cleaning procedures is almost like reverting to muscle memory at this point. 

“Contact cleaning and maintaining social distancing has become routine operation,” Vocos said. “The old standard cleaning is now substandard. We are hyperfocused on high touch points and making sure we are limiting the number of persons in any given area.” 

Multifamily property staff exuded a similar sense of wearily facing just one more battle in a long war. American Apartment Owners Association Director of Marketing Alexandra Alvarado said the delta variant hasn’t had any impact on lease signings or interest for apartments, which have commanded rising rates in many big cities as leasing increases, but it’s starting to impact marketing messaging. Property owners who used to push common area amenities such as pool and gyms, big factors in charging premium rents, have changed their upsell messaging to focus more on the flexibility of rental deposits and more modest monthly rents. 

Like office landlords and property managers, residential staff have the experience dealing with earlier periods of the pandemic, and they have been able to quickly pivot to deal with delta variant-related issues. 

“We’ve seen a shift towards technology and low-touch solutions by the big landlords,” Alvarado said. “Those kinds of practices, such as signing leases remotely, came about during the pandemic and haven’t gone away. It hasn’t really been that crazy of a transition for property managers.” 

Ari Chazanas, CEO of Lotus West Properties, a property management firm that oversees roughly 500 units in west Los Angeles, near Brentwood, said he’s actually been quite busy in recent months, as demand has picked up considerably and rental prices have rebounded. 

His staff hasn’t made many significant shifts in policy since the delta variant, outside of LA County’s mandating masks when indoors. Like many residential landlords, his biggest sources of anxiety and angst right now are back rent and the slow pace of rental relief distribution. 

“We’re calling in, tenants are calling in, it’s not changing, it’s so frustrating, I can’t really put it into words,” he said. “Where’s all this money? What’s Gov. [Gavin] Newsom talking about, you know?” 

So even as the delta variant shreds best-laid plans for returning to the office and exacerbates existing strains on residential owners, the industry is more prepared. The new normal for building operations will, for the foreseeable future, include a lot more caution and preparation and a better understanding of the pace of change. 

“We’ve learned that nothing is going to happen quickly, so even as we approach Labor Day and beyond, there isn’t going to be one magic date where everybody comes back,” Gadaleta said.