COVID-19 and the new tested definition of real estate.Oluwakemi Adeyemo
One question in a survey we conducted in the year 2018 says: what readily comes to mind when you hear the word real estate? 20% of respondents said the word wealth comes to mind, 30% said land, another 30% said house, while 15% said money.
This shows that real estate takes on different definitions for different people in different phases of life. Several reasons have been found to contribute to each respondent’s perspective of what they think real estate is – reasons such as background, self-development, migration experiences, exposure and education. However, the meaning of real estate for an individual is not necessarily limited to just a word. It can be a combination of two or more words.
For instance, land as an asset is defined by the business dictionary to include anything on the ground (such as buildings, crops, fences, trees, water), above the ground (air and space rights), and under the ground (mineral rights), down to the center of the Earth. This definition should broaden your perspective of what real estate is.
Definition and meaning can also be progressive. This means that events or improvement in mindset can cause a redefinition of what real estate means to an individual. The economic crisis, as a result of COVID-19, is already causing changes in different sectors and bringing to the fore some previously existing situations.
It is expected that the effect of COVID-19, how we have responded, and the resultant economic crisis will trigger changes in consumer behavior and needs. The current crisis will also reveal areas with inherent potentials for economic growth that have previously been neglected.
Isolation and social distancing, for instance, have made the need for some kind and volume of space necessary, while the work from home situation has also shown that some work can be done more effectively with less use of space in certain locations. The health challenge as a result of COVID-19 has also caused the conversion of spaces.
While real estate provides a framework for many other businesses to function, businesses are having to redesign products and services to meet current needs that drive the economy and have suddenly become urgent. A case in point is Tiffany Amber, a Nigerian owned luxury women’s wear brand. To keep operations going, the founder took responsibility for a situation she didn’t cause. Though a luxury brand, she made a switch, within the existing framework, to meet the current needs of customers, which are the essential, non-luxury items.
For individual investors who already have their minds fixed on just shelter, it is time to re-imagine real estate and shift from a definition that puts you in the danger of considering and relying on a single aspect of real estate. You must figure out how real estate serves you on different levels which then leads to how you define it and how you approach investing.
This is a time to evaluate what should be given up and what is profitable enough to be retained. The CEO of Tiffany Amber suspended a product line that was not only the signature of the brand but one upon which the entire business was built on. However, the business did not give up the excellence, teamwork and value for the human elements that make the business work. This ensures the business will not shut down in this crisis.
Real estate business leaders also need to re-imagine how real estate serves customer needs. The existing live, work and play design model, may now need to be tweaked to include the post-COVID-19 reality of convenience as well as productivity.
Another way to begin to re-imagine real estate is to find out and be part of conversations that capture and expand essential needs around the much projected and common definition of the real estate framework – conversations that, perhaps, solve existing problems or speculate possible outcomes of post-COVID-19.
Participating in a process or system helps you create or increase capacity for it. For example, participating learning creates the possibility and capacity to learn more. And the capacity created leads to a demand that must now be fulfilled.
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