COVID Pushes Real Estate Into The Future

covid sanitationThe coronavirus could be the crisis that finally propels the tech-averse real estate industry into the 21st century.

Location matters less now that the office is the kitchen. Size matters more now that everyone is at home. And the best way to justify exorbitant prices is no longer the building’s amenity package; it’s peace of mind walking from the lobby to the living room.

These are the touch points for a host of new or newly valuable technologies emerging in the post-COVID housing market, from rent-regulated apartments to luxury condos. They range from robotic furniture that reimagines itself inside our shrinking walls to contactless apps designed to bring neighbors together. They are futuristic takes on prosaic features, like ultraviolet wands in air ducts and “Ghostbusters”-inspired blasters to hose down Amazon boxes. Some may be passing fads.

Still, the ones that stick could have long-term implications for a stubbornly analog industry, even as some critics have raised concerns about data collection and privacy. And it remains unclear whether these improvements will reach the workaday housing market or remain a luxury niche.

Here are some of the products and ideas that could remain after the pandemic ends.

Robotic Furniture

Transforming furniture is hardly new; consider the folding Murphy bed, patented more than a century ago. But housebound workers cramped in overpriced studio apartments might welcome an upgrade that not only saves floor space but doubles as a tidy Zoom background.

Ori, a robotic furniture company short for “origami” that was founded in 2015, recently introduced the pocket office: an almost 7-foot-tall sliding desk that, with the tap of an app, expands from a 30-inch-deep cabinet into a full-size desk with storage and library shelves. When sealed, it’s a TV console with shelving and a Scandinavian aesthetic; when it opens, with the aid of a low-profile track system, it splits down the middle to create an office nook with a retractable desk on one wall and a bookcase and standing-desk setup on the other.

“People are expecting more from their space,” said Hasier Larrea, the company’s founder and chief executive, on a video call from his one-bedroom apartment in New York City. “But square footage is the most expensive thing out there.”

That has always been true in big cities, but work-from-home policies and the uncertain prospect of a safe daily commute even years after the virus recedes has been a boon for the company, Larrea said.

“This is not only in New York, San Francisco, Boston. We’re seeing this from Boise to Minneapolis to Houston,” he said, noting that their bookings have “quadrupled” from last year, without specifying sales, and that clients have purchased Ori’s furniture in more than 15 cities, mostly in rental buildings.

Bumblebee Spaces, a San Francisco-based company that creates modular beds and furniture that can be suspended from the ceiling with heavy-duty straps to maximize floor space, has also seen growing interest, said Sankarshan Murthy, chief executive and co-founder. The products also have software that can keep track of the items being stored.

“What changed is that people spend more time at home,” Murthy said, and they “realize that traditional architecture is broken.”

For the most part, the companies do not sell directly to consumers but to property managers looking to maximize the use and appeal of studios, one-bedrooms and sometimes bigger units. In a multiunit deal with a property owner, an Ori assemblage costs $5,000 to $10,000 per unit. Bumblebee Spaces sells its floating bed and a few storage units together for about $10,000 to $40,000, depending on the installation and product mix.

That could change as the companies ramp up efforts to sell to residents.

It can be a hefty commitment: Ori’s king-size “cloud bed,” a mechanical bed frame that can be raised into the air like a canopy to reveal a built-in sofa or desk, takes up 78 square feet, weighs about 1,140 pounds and needs a ceiling clearance of roughly 8 1/2 feet. The retail price hasn’t been set, but for condo buyers, it could range from $10,000 to $20,000.

But in markets like Manhattan, where apartments cost an average $1,532 a square foot last quarter and studios sold for a median price of $495,000, the company is betting the math will pay off.

Healthier Buildings

The most important changes in apartment buildings are likely to be the least appreciated: systems to sanitize surfaces, diffuse viruses and assuage resident fears.

There is an industrywide push to refine and better circulate the air in common areas, elevators and lobbies to reduce the spread of the virus, said Douglas Mass, president of Cosentini Associates, a building systems engineering firm.

The aim is to raise the ventilation standard to MERV-13, an air filter rating considered efficient, but not perfect, at capturing airborne viruses. By comparison, a typical window air conditioner has a MERV-8 rating or lower, and hospitals use HEPA filters above MERV-16. In all cases, most experts agree that there is no substitute for social distancing and face coverings.

Still, the majority of big-city housing stock is too old to support the higher filtration standard because the thicker filters require more air flow, and only buildings completed in the past 20 years or so can easily make the upgrade, Mass said. Instead, many buildings are making incremental changes elsewhere, especially in the tight confines of elevators.

ThyssenKrupp Elevator, one of the largest elevator manufacturers, has begun installing air systems that pull in purified air straight from the elevator shaft. In another, the air is treated with ultraviolet light (passengers are not exposed) and hydrogen peroxide that neutralize bacteria, mold and viruses. One model introduces ionized particles into the cab to disinfect the air. The products range from $3,500 to $4,000 per elevator.

The company has devised a smartphone app that lets users call an elevator without pressing a call button, and also sells a low-tech alternative: “toe to go,” a foot pedal in lieu of buttons at the base of the elevator.

“These were not on the radar whatsoever,” said Jon Clarine, the company’s head of digital services, noting that COVID accelerated the release of several products.

But the speed at which some of these technologies were deployed demands more scrutiny, said William P. Bahnfleth, a professor of architectural engineering at Penn State and chair of the epidemic task force at the American Society of Heating, Refrigerating and Air-Conditioning Engineers.

“It sounds more like marketing to me than science,” he said of some claims about ionization and other products. “The question is, ‘How much risk is there, and how much do these mitigate it?’”

They are nevertheless in demand. Adam Berenson, vice president of Dermer Management, a property management company, just installed a similar ultraviolet light system for $5,000 in the elevator of a prewar co-op in New York City. Many of the loft apartments open directly to the elevator, and residents were concerned with lobby air seeping into their space.

“I don’t think COVID is going away anytime soon,” he said. “And I also don’t believe that this is going to be the last one.”

And don’t be surprised to see the building staff donning what look like the proton packs from “Ghostbusters.” More commonly seen in hospital settings, building managers are beginning to use electrostatic sprayers, a battery-operated pack and fogger that positively charges the particles of a liquid disinfectant to coat surfaces more evenly.

Alex Elkin, the owner of Eastbound Construction based in New York City, has begun using the foggers in high-traffic areas like package rooms, gyms and bike storage. It’s an incremental part of the new normal, he said, but he has reservations. Without regular maintenance or application, many of these additions are ineffective, he said, and even the best regimens should not instill absolute confidence.

Without proper precautions, he said, “the reality is, none of these things is going to protect you if you’re sitting 2 feet away from someone.”


Developers have used deluxe amenities to help justify shrinking apartments and record prices in recent years, and now millions of square feet of residential spas, lounges and playrooms are collecting dust because of state restrictions or resident trepidation.

“Post-pandemic, everything has changed,” said Rebeca Park, the lifestyle director with Extell, a prolific condo developer in New York.

At One Manhattan Square, an 815-unit skyscraper that lured buyers with more than 100,000 square feet of amenities, Extell has begun using a reservations app to regulate timed visits to spaces like the private bowling alley, basketball and squash courts. (The hammam, whirlpool and several other perks remain closed because of state restrictions.)

Several property managers said they had adopted similar apps to manage their communal spaces, but ongoing limitations on capacity could mean a shift in the types of perks that developers and residents prefer in a post-COVID world.

One likely beneficiary is touchless technology that uses key fobs or smartphones to unlock doors. In the third quarter, sales at Latch, a touchless door operating company, were 50% higher than the same time last year, said Luke Schoenfelder, founder and chief executive.

“We’ve surpassed our expectations,” he said, noting that the company booked $100 million in sales last year and is on track to exceed that. A new partnership with Google’s Nest thermostat will also allow residents or landlords to remotely change the temperature or unlock doors with the same app.

At the American Copper Buildings, a luxury rental project in Manhattan completed in 2017, several tech-forward amenities, like keyless apartment entry and destination dispatch — in which the elevator is summoned from a panel outside the car — could become more commonplace, said Marc Kotler, a senior vice president at FirstService Residential, which manages the building.

The virus has also reinforced the idea that some services should not be considered amenities but utilities that are essential. Rachel Fee, executive director of the New York Housing Conference, a housing policy and advocacy nonprofit, will ask the city to underwrite the cost of Wi-Fi in new affordable-housing projects and public housing renovations.

“Think back to the spring, to everyone who needed access to unemployment benefits and to remote learning,” she said.

Apps and Data

Many of these new features will bring big data to bear on a typically pen-and-paper industry.

RXR Realty, a large development and management company, has created the RXO app, a concierge service and community forum for its residents that can be used to pay rent, request maintenance, book amenities and chat with the staff, among other things.

It was used to great effect at Harbor Landing, a luxury rental in Glen Cove, Long Island, where neighbors received an alert to sing “Happy Birthday” to a young boy having a socially distanced backyard gathering. It can also monitor the number of people registered to enter the gym, for instance, and restrict access to those who haven’t made reservations.

There are more practical applications for the industry. Scott Rechler, chief executive of the firm, said that, based on dozens of criteria — how often you parked your car, checked your mail or received guests — it could help predict, with 80% accuracy so far, whether you would renew your lease. The program is still in development but is being tested in three rental buildings, with plans for a broader rollout next year.

“We’d been sort of flying blind as an industry for so long,” Rechler said, but this kind of data collection, which he said was anonymized, could cut costs and help anticipate residents’ needs.

Another program, called “computer vision,” that the company plans to introduce this month will use new technology to determine if people observed on surveillance are wearing masks and social distancing in common areas, to help alert the staff about noncompliance. So far, it’s being tested in the company’s commercial properties.

Some worry that similar tech can overstep privacy boundaries, especially as it moves into lower-income developments. Last year, three congresswomen, including Yvette Clarke, representing parts of Brooklyn, proposed legislation that would ban the use of facial and biometric identification technology in public housing.

“I am in full support of innovative technologies, but we must work to ensure the proper research and testing goes behind it,” Clarke said in a statement. “We need to be very mindful of underresearched technology that can be harmful for vulnerable communities.”


Source:  SFBJ