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From Density to Distancing

May 13, 2020

Ten short weeks ago, business was about packing in as much density with as many people as possible. From hotels, conventions, sports venues, air travel, resorts, retail, and office buildings – down to going to a Costco.

Now, ten weeks later, it is all about staying separate and distancing yourself from other people. How can this be possible? Because COVID-19 (‘CV”) has caused a shift in the paradigm of personal life and commercial life that no one saw coming. Ten weeks in, we now judge every face-to-face interaction differently than we used to.

Behind closed doors, almost every company is fearfully asking themselves, “will life as we knew it ever go back to the way it was?” The scary answer is maybe not. The most advantageous answer is it will come back but not at the same levels as pre-CV. Every company from a sandwich shop, hotels to sports venues, and entertainment are projecting different economic modeling because of the long-term effects on their industry. I was on a conference call recently discussing the various aspects of reopening the office workplace on June 1. Everything was discussed from ingress-egress, ice machine, copier to directional walking patterns in the office. The mandates and guidelines will change how people feel about in-office work, and that will be reflected in dining, travel, hotels, retail, entertainment, conferences, and so forth.

Working remotely has, for several years, been a discussion topic for many companies, but was mostly relegated to the back burner regarding its immediate need. As of 10 weeks ago, the need to implement and fully understand how to work remotely became the only focus. The results are enough to shake any industry and any company because the world was forced to learn how to make it work, and they did. Now companies are looking at everything from travel, office space, client engagement to liability insurance for potential changes in their financial modeling, possibly long term.

The actual result of the past ten weeks of CV will not become fully known until later this summer and fall. The potential changes to how businesses operate and the effects on the idea of dense groups of people in the same place will likely affect almost every commercial real estate segment going forward. For those segments where density was the objective 10 weeks ago, there may have been a longer-term shift in the way people think about it and how it affects personal movement. This shift could have lasting effects on almost all commercial real estate segments


H. Keith Thompson has been a national hotel broker for 29 years, most recently as the founding principal of Hotel AG when it sold to Avison Young in January 2017. During his career, he has been involved in approximately 1,000+/- hotel transactions totaling multiple billions in market value. Thompson began his career in 1980 in the food and beverage side of the industry, progressing into real estate ownership by 1988 and into the brokerage side of hotel real estate by 1990. He has earned many sales awards through the years and is often asked to speak at hospitality conferences and has had many published articles for the hospitality industry. He is an active member of his church and has personally served in several leadership capacities within his community.