Co-working spaces continue to have a big moment in the commercial sector as more businesses are drawn to flexible and short-term solutions amid COVID-19 and its latest fast-spreading delta variant.

Technology companies are reportedly one of the major industries that are snatching up co-working spaces, such as WeWork, The Wall Street Journal reports. Their rental contracts may be for “hot desks” or for more than 50,000 square feet leases that span just a month.

Some companies are turning to such short-term solutions while they make decisions on return to work policies in the pandemic. Many companies had originally planned for this fall, but a surge in COVID-19 cases may put that timeline in jeopardy.

“In a time of uncertainty we provide flexibility to corporations and small businesses trying to figure out what their employees want,” Melinda Holland, WeWork’s head of sales for the U.S. and Canada, told The Wall Street Journal.

WeWork, a giant in this space, has seen business quickly climbing in the pandemic. It generated $215 million in revenue in July, one of the strongest desk sales months on record. Industrious, another shared space firm, also reported some of its strongest sales in the company’s nine-year history last month.

“Inquiries are off the charts with very short lead times,” Debra Larsen, chief executive and founder of WorkHouse, which rents out desks in New York. “Companies are solving for September.”

Companies are using flexible spaces to give employees who are working from home another option for work. Some firms are using these spaces as a substitute for their pre-pandemic headquarters that may congregate a higher number of people. Or they’re using it as a way to recruit more employees—without relocating them—by offering them workspaces all across the country.

While co-working spaces take off, leasing activity in the office market has been recovering much more slowly. Office vacancy has climbed to 18.5% in the second quarter, which is nearing a 19.7% record that was reached in 1991, according to Moody’s Analytics.

“Companies are still in that discovery phase that work is going to be done differently,” Julie Whelan, global head of occupier research at CBRE Group, told The Wall Street Journal. “The beauty of these [co-working] providers is that if something doesn’t work they can bail and try something new.”

©National Association of REALTORS®
Reprinted with permission

The blistering cold temperatures throughout the country this week may put some properties at risk of damage. Watch out for these signs.

Many areas of the country are experiencing blistering cold weather, even those that aren’t used to freezing temperatures. Rapid temperature swings could cause substantial issues to a home’s foundation, warns Groundworks, a nationwide foundation services company.

Every year, one in 60 homeowners file claims related to water damage or freezing, according to the Insurance Information Institute. That accounted for nearly 20% of all insurance claims in 2020—at an average cost of more than $10,000 per claim. The price tag to fix a damaged foundation could easily stretch even higher.  

REALTOR® Magazine caught up with Brian Black, Groundworks’ director of sales training and business development, to learn more about how a harsh winter could be affecting a home’s foundation and the signs of potential damage.

Q: How can cold, wintry weather damage a home?

A: Brutal cold is damaging in several ways, depending on your home’s foundation type. If you live above a crawl space, your home’s pipes are typically located beneath the floors. Freezing temperatures can cause pipes to burst, resulting in extensive damage. Frozen pipes are more than just frustrating. According to the Federal Emergency Management Agency, a one-inch flood caused by a broken pipe can result in about $25,000 in damage. 

If you have a basement or slab foundation, it’s the concrete you need to worry about. Concrete is porous, meaning it absorbs water. Water expands when it freezes, causing concrete to break and crack. When the spring thaw eventually arrives, water can easily find its way into your home through these cracks.

Furthermore, frozen ground is one of the three causes of inward basement wall movement. The other two are the weight of the soil and the weight of water in the soil. When these three contributors combine, it pushes basement walls inward.

What are the signs to look for?

For homes with a crawl space, the first sign of a problem is cold floors. As the issue progresses, homeowners will notice a problem when a faucet is no longer working. If none of the faucets are running, the frozen pipe is probably near the main water line.

Homeowners with basements and slab foundations should look for cracks both inside and outside their home. Cracks can vary in size and direction. That can help tell professionals why the problem is occurring. Inward wall failure will show as horizontal and vertical cracks on the basement wall or even drywall.

What should homeowners do if they suspect any damage to their foundation?

It’s best to have a foundation specialist inspect any cracks as soon as possible. Your home’s foundation supports everything in your house. If it’s damaged, you’ll discover costly secondary problems very quickly. So, it’s best to act fast.

Foundation work isn’t a DIY project. Choosing a company with the knowledge and tools to best solve your specific foundation problem is the best choice. Look for a company that customizes repair options to your home, offers long-term warranties and has a history of working with the specific soil and climate in your area.

What makes a home vulnerable to frozen pipes?

First, it’s important to understand where the majority of your pipes are located. In different parts of the country, pipes are installed in different areas of a home. In warm-weather regions, pipes are weatherized to handle summer heat and are placed in exterior walls and attics. But this makes them vulnerable to damage during rare cold events. In cooler climates, pipes are often located within the floor joists in basements and crawl spaces.

The best way to prevent frozen pipes and create a more comfortable environment overall is to seal out any outside air through encapsulation. But there are some easy steps you can take to beat the freeze and keep water flowing right now. Consider insulating pipes, allow for a constant drip, open cabinets to allow for warm air circulation and remember to leave the heat on and keep a consistent temperature throughout your home during the winter.

What can homeowners do to “winterize” their property?

The number one most effective route to winterize your crawl space is through encapsulation. Sealing your crawl space from outside air and circulating warm, conditioned air protects pipes and creates a more comfortable living environment. Plus, you can save nearly 20% on your energy bills. Homes with basements have a similar process involving sealing the rim joist where pipes enter and exit the home, along with moving warm air throughout your home. All homeowners should check for plumbing leaks and look to improve energy efficiency by replacing filters or adding a smart schedule on their thermostat before sub-zero temperatures and blustery winter weather hits.

©National Association of REALTORS®
Reprinted with permission

Office buildings are looking for ways to add in more outdoor spaces for employees to relax, work, and meet up. It’s become a must-have space since the pandemic and an important amenity in trying to attract employees back to the office.

“We’ve been involved in office space and building design, and the evolution of office buildings, for 40 years,” Dan Kaplan, a senior partner at FXCollaborative, an architecture firm, told the Commercial Observer. “And, over the last 10 to 12 years, the demand for exterior space in office buildings has grown, and, with the pandemic, it has really exploded.”

More green and outdoor space have become a greater priority for office buildings, whether a newer or older building.

“There are plenty of great buildings that are older and vintage, and might not have the ability to activate terraces to provide outdoor space, but this is a place where all owners and landlords are looking to set themselves apart,” Michael Slattery, associate CBRE field research director, told the Commercial Observer.

Even projects like The Spiral in Manhattan feature a spiral of outdoor decks throughout the skyscraper’s 1,005-foot height. Each one of the 65 stories has a terrace.

“People don’t like to be holed up,” Jeffrey Paine, co-founder of Duda/Paine Architects of Durham, N.C., told the Commercial Observer. “People want to be able to step outside during the day, even in a high-rise office building.”

Office buildings want their employees to be able to use the terraces and outdoor spaces all year too. They’re bringing outdoor space heaters as well for when the weather cools. Also, more “green” is being added indoors. Biophilic elements like indoor plants also are being brought into office spaces.

“People have realized that having the ability to go outside, and having the ability to integrate that with indoor space, is just a tremendous advantage in this culture of trying to attract and retain new talent,” Elliott Ingerman, partner for the Tribeca Investment Group, told the Commercial Observer. “If you’re working 10 to 12 hours a day, take a little pop out to a terrace. Post-pandemic, we now realize we have to lure people back tow ork. Work should not be a boring environment.”

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Reprinted with permission

Small inns and bed and breakfasts saw business rapidly decline during the pandemic. But operators are recasting their inns and offering them to home buyers in a new light—as a new home.

The Wall Street Journal reports that home buyers are purchasing spacious B&Bs and renovating them into single-family homes. A shortage of homes for sale and a desire for larger homes is fueling demand.

Rick and Suzanne Weichert purchased the 4,800-square-foot Jabberwock Inn in Monterey, Calif., for $2.38 million in 2014. In 2020, they closed for four-and-a-half months during the start of the pandemic. They recently listed the home for $4.95 million as a single-family home, believing a buyer from the Bay area may gravitate to the half-acre property—one of the largest in the area—to work remotely.

“It was an insanely difficult year,” Suzanne Weichert told The Wall Street Journal about their decision to sell.

B&B revenue dropped 43.7% to about $1.3 billion in 2020, compared to 2019, according to the research company IBISWorld. The number of B&Bs also fell, dropping about 1,400 to a total of 7,340.

Dave Elliott, who co-owned two properties called the Taylor House B&B in Jamaica Plain in the Boston area, told The Wall Street Journal that running a B&B has never been profitable, even before the pandemic. The inn has 11 guest suites in two adjacent properties. The properties are “worth more money on the open market as a residence” since it has both a pool and dock access, Paul Leys of Gustave White Sotheby’s International Realty told The Journal. The inn closed after 24 years and was listed on the market this summer for $3.35 million.

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Reprinted with permission

Retailers in the U.S. plan to open more new stores this year than close stores, indicating a hopeful sign for a rebounding sector. The news of more retailers in expansion mode follows a strenuous year of survival for many retailers, in which the COVID-19 pandemic caused many shutdowns in 2020.

Grocery, fast-casual, and value stores are the retail leaders that are planning to expand this year, according to the report from RetailSphere. More than half of the companies in these three sectors say they intend to further develop their businesses this year, according to RetailSphere.

“Some companies are opening a handful of stores; others are expanding by hundreds,” according to the report. “Grocery, convenience, and fast-casual and value dominate the list of national and regional retailers that are growing.”

Discount stores—like Family Dollar and Dollar Tree—are expected to add the most stores this year, opening 500 and 700 locations, respectively.

During the pandemic, retailers closed a record number of locations, according to CoStar Group. But the increase in vaccinations and a rebound in consumer spending in brick-and-mortar retail locations is helping the retail sector to recover.

2021 is on track to have the least amount of retail shops closing in more than a decade, according to CoStar.

The sector isn’t out of the woods yet, however. Fears over an increase in COVID-19 cases could curtail in-person shopping once again. In July, 58% of shoppers surveyed say they felt safe going into stores. But in August, the highly contagious delta variant began to spread in the U.S., causing that percentage to drop to 47%, according to a retail report from Springboard.

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Reprinted with permission

A recent decline in lumber prices is helping to mitigate building costs, but that effect is being offset by numerous increases in other building materials that are surpassing records. Home building materials have climbed by up to 19% over the past year, according to the Bureau of Labor Statistics Producer Price Index.

The building materials that have seen the largest increases so far in 2021, according to the National Association of Home Builders’ Eye on Housing blog, include:

• Steel mill products
• Building paper and building board mill products
• Asphalt
• Plastic water pipe
• Fertilizer materials
• Laminated veneer lumber
• Thermoplastic resins and plastics materials
• Structural metal joists and concrete reinforcing bars
• Wood window and door frames
• Copper pipe and tube

The price change in steel mill products has been most notable, climbing 81% year over year. That follows an 11% increase in 2020.

The median sales price of a new home in July was $390,500, an 18.4% increase compared to a year earlier, according to the Commerce Department. Builders say the higher prices are due to the increases in development costs, including materials, that are being passed along to home buyers.

©National Association of REALTORS®
Reprinted with permission