Webinar Recap: What You Need to Know About Commercial Office Space During COVID-19 in the Bay Area

Written By: JoAnne Tobias

In the first of a series of webinars, McKenna Schott, the Marketing Manager at Source, sat down with founding partner Sam Perry and VP Ben Kerran to discuss the state of commercial construction in the Bay Area.  

Below are some of the key takeaways from our conversation. You can listen to the full webinar, including questions from our audience here.

Takeaway #1  Planning still comes first.

 Because Source is working in 6 different counties throughout the Bay Area, we needed to respect 6 different guidelines. Even though we wanted to move forward as quickly as possible, we first needed to create a cohesive plan that would protect our staff and community.

The leadership team gathered daily on Zoom. Sam supported the legal and overall planning strategy, while Ben took on how the guidelines would function on projects.

Whenever we came across a contradiction among the official guidelines, we went with the stricter interpretation. We focused on visualizing actual processes. What will work well? What aspects of these changes will be most challenging? We were essentially re-inventing what a post-Covid jobsite would look and feel like.

Early March, we had our COVID policy and started training our staff.  

Takeaway #2 Different requirements for different sized jobs.

Projects of all sizes required a site-specific COVID supervisor, physical distancing, daily screening, extra sanitation, etc, but large projects (anything over 20k square feet) had additional requirements:

1. Site-specific health and safety plan and officer

2. Staggered trades and/or shifts (to minimize density)

3. A 3rd party Jobsite Safety Accountability Supervisor (JSAS officer)

When we had our first inspection, the JSAS officer reported that our project was “the most thorough COVID Large Construction Project (LCP)” he had ever seen. That statement gave us confidence that all our planning and diligence would go a long way in keeping our job sites safe. 

 

Takeaway #3 How did new COVID-related protocols affect costs?

Cost and scheduling go hand in hand. To get a thorough understanding of the parameters, we re-built every schedule based on the current mandates. 

Schedule impacts we needed to consider on each project:

■ Social distancing impacts. No longer able to stack trades or dovetail scope. Compliance requires a reduction in the amount of people on site.

■ Additional processes require additional time. “COVID Setup,” certification process, cleaning and temperature checks.

As we worked through these scenarios, we wanted to be very transparent with our clients about any costs associated with safety and compliance. Detailed planning helped these conversations go smoothly.

 

Key Takeaway #4:  Changes you’ll see in commercial construction.

We’ve added Safe Site Check-in Technology to all of our projects. This takes workers through a touchless screening process using QR codes to show they’ve met/understand protocols and are approved to enter the site. Now that we better understand the official sanitation standards, we’re able to curb the costs of 3rd party vendors and use some of our own staff to cover sanitation and tracking.

Even with all these protocols in place, you can’t control if people get exposed once they leave the site. When someone tests positive- which has occurred twice since returning to work- we had a process in place to deal with it. The notifications, extra sanitation, and contact tracing let us quickly isolate the two cases. 

We’re happy to say both cases were mild, the folks have fully recovered, and no job closures were required. We’re also happy to be able to say with confidence that all our planning is working as it should to keep folks safe on our jobs.

 

Key Takeaway #5:  What’s going on with building costs? Here’s a brief overview, starting from Spring through Q4. 

    • Q2 flattened fast. The industry saw a big drop off on opportunities as several large projects went on hold or were canceled.

    • By mid Q3, uptick in RFPs. Optimism growing for 2021.

    • End of Q3 costs dropped by 20%.

    • Mid Q4 industry focused on backlog. 

Opportunities are starting to improve, which is what we’d expect at this time of year.

 

Key Takeaway #6:  So is it better to build now or build later?

This really depends on what type of business you are, and how you function. Certainly, costs are at a major discount right now and those trends only last so long. That's the key question: at what point do costs start shifting back upward?

Another critical element to consider is permitting. Over the counter permits are not possible right now. In fact, just getting a meeting scheduled to submit your project can take 4 - 8 weeks. If any build is in your future, start the permitting process as soon as possible to take advantage of current costs.

Listen to the full webinar here.

Join us for our next webinar early next year for a chat with a Director in the real estate community to understand emerging trends in the leasing market.