Spring 2021 Issue - 43

time as an opportunity to reflect on their investment
programs and how they align with their values.
COVID has accelerated trends that already existed,
especially in the areas of creating healthy buildings,
ecologically friendly environments, and more access
to open space. Also, after the death of George
Floyd, pension funds with diversity and inclusion
goals have redoubled their efforts to meet those
goals. Two examples of the public sector rethinking the social role of real estate: some provinces
here in Canada have approached the real estate
community about donating spaces in locations and
facilities that have already been managed for COVID
protocols, such as malls, to provide space for vaccinations during the winter. A second example is
approaching hoteliers about providing temporary
shelter for the homeless, quarantined travelers, and
frontline medical workers concerned about their
families' safety.
Especially now, with the virus
highlighting that, companies can't focus only on
profit, they have to look at the triple bottom line.
COVID has had a catastrophic impact on Hawaii
because we are so dependent on tourism, affecting
not only the hospitality sector but every sector that
supports it. The Sustainability Business Forum, a
group of business executives in Hawaii who have
made a commitment to the triple bottom line, has
been discussing how we can help develop a more
diverse infrastructure, which includes investing in
education. Our universities as well as our community colleges have put together a curriculum that's
helping displaced workers learn new skills, especially in the energy and agriculture industries.
BETTINA MEHNERT:

How are investors working to navigate
the economic uncertainty ahead?
A lot of companies are still insulated
because they are under leases that haven't expired,
and they have already implemented strategies and
negotiated with landlords on rent deferments. We're
not that far off from the 2008 economic crisis, so
there is a lot of muscle memory that people are
acting on in resolving the short-term impact from
a declining economy. Starting this year, however,

DAVIS:

when some of those temporary Band-Aids start
expiring and leases come up for renewal, then we
may see significant changes. Fortune 500 tenants in
the bigger class A office buildings are going to be
able to pay their rent, and the landlords for those
buildings will be fine. In the retail and hospitality
sector, however, it's a different story.
The retail sector has been badly impacted,
so retail owners are trying to figure out creative
alternative uses and redevelopment scenarios,
like adapting strip centers into affordable housing
and building condominium or apartment towers on
empty big-box store sites. There is discussion for
the first time in many places of passing inclusionary zoning laws that would require new residential
developments to include affordable housing units.
Apartment rents have dropped in some places,
which helps a bit with affordability, but demand is
only going to increase, so we need new strategies
to address affordability, particularly in cities that are
already large or are growing rapidly.

ERIXON:

MEHNERT: Hawaii has little land left for development. We have to balance agriculture, tourism,
conservation, and a tremendous need for affordable
housing, so interest in adaptive use is picking up.
Even before the pandemic, there was the challenge
of what happens with shopping centers, and now
also office buildings. So what are we going to do
with all this surplus office space? There is an opportunity to look at converting it to affordable housing.
And it seems logical that many shopping centers
could be adapted into senior housing, because they
have walkable spaces.
McCABE: People in the real estate industry are
becoming more aware that they need to think about
different risk factors than they did before. Last year,
Spencer Glendon [senior fellow at the Woodwell Climate Research Center in Falmouth, Massachusetts]
spoke to ULI's trustees about sample bias in relation to why we're unprepared for where the world
is going. It all depends on the data set you choose:
if you look at the past 75 years, there have been
no world wars, we've had one bout of inflation and
one economic crisis, and 37 of those 75 years have
experienced falling interest rates. But if you look

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Spring 2021 Issue

Table of Contents for the Digital Edition of Spring 2021 Issue