TRANSPORTATION, OFFICE ASSETS, AND COVID-19: PROPERTY MANAGEMENT SURVEY RESULTS - THOUGHT LEADERSHIP SERIES JULY 2020

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TRANSPORTATION, OFFICE ASSETS, AND COVID-19: PROPERTY MANAGEMENT SURVEY RESULTS - THOUGHT LEADERSHIP SERIES JULY 2020
THOUGHT LEADERSHIP SERIES

TRANSPORTATION, OFFICE
ASSETS, AND COVID-19:
PROPERTY MANAGEMENT
SURVEY RESULTS
JULY 2020
TRANSPORTATION, OFFICE ASSETS, AND COVID-19: PROPERTY MANAGEMENT SURVEY RESULTS - THOUGHT LEADERSHIP SERIES JULY 2020
TRANSPORTATION, OFFICE ASSETS,
AND COVID-19: PROPERTY
MANAGEMENT SURVEY RESULTS
Commercial real estate and the transportation sector have both been greatly impacted
by COVID-19 and the related stay-at-home orders that were implemented around the
country. Virtually overnight, many office properties were temporarily closed or mostly
vacated, with tenants transitioning to teleworking. The COVID-19 pandemic has many
tenants rethinking the nature of work, with competing considerations creating tension:
the need to allow for more space for each worker in the office (to better accommodate
social distancing) and the possibility of incorporating more remote work into a
long-term occupancy strategy. Concerns about maintaining corporate culture and
the isolation of the work-from-home environment also play a role in decision making
around office space needs and preferences.
Transportation considerations, including near-term health concerns regarding mass
transit ridership, are a key factor in ensuring office space can be safely reoccupied.
Shared mobility has been dramatically affected, with subway ridership in major
cities declining by as much as 95 percent in mid-March, shortly after the pandemic
was recognized as a national emergency in the U.S. The rate of infections has
varied around the country, and some states experienced an increase in coronavirus
cases as summer began. However, as others are ending stay-at-home orders and
tenants contemplate a return to the office, property managers must be prepared for
shifts in how people travel. To that end, Newmark Knight Frank, in partnership with
transportation consulting firm Wells + Associates, surveyed NKF office property
management professionals to assess their priorities as they prepare to serve
tenants in the period ahead. Property management professionals at NKF have a keen
understanding of the needs not only of their tenants but of their owner-investor clients
as well; the survey results reflect this collaboration as they work to meet the evolving
challenges presented by the COVID-19 pandemic.

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TRANSPORTATION, OFFICE ASSETS, AND COVID-19: PROPERTY MANAGEMENT SURVEY RESULTS - THOUGHT LEADERSHIP SERIES JULY 2020
TABLE OF CONTENTS

KEY FINDINGS                            04

SURVEY RESULTS                          05

CONCLUSIONS AND RECOMMENDATIONS         10

METHODOLOGY                             11

APPENDIX                                12

 THIS STUDY WAS PREPARED BY NEWMARK
 KNIGHT FRANK IN PARTNERSHIP WITH
 WELLS + ASSOCIATES

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TRANSPORTATION, OFFICE ASSETS, AND COVID-19: PROPERTY MANAGEMENT SURVEY RESULTS - THOUGHT LEADERSHIP SERIES JULY 2020
KEY FINDINGS

1   Managers of urban office properties are concerned that over the coming year their assets
    will be subject to a variety of transportation challenges, such as decreased accessibility from
    public transit, increased demand for on-site parking, increased demand for on-site bicycle-
    related amenities, and increased traffic around their sites in urban areas.

2   Managers of office properties in suburban and exurban locations are not as concerned as
    their urban counterparts about transportation challenges over the coming year.

3   Managers of urban properties are concerned about both an increase in telework as well as
    reduced occupancy and rental rates, suggesting they believe an increase in telework will
    place downward pressure on asset performance.

4   Managers of properties in suburban and exurban locations generally do not expect occupancy
    or rental rates to decrease over the coming year, but they are more concerned about the
    possibility of decreased occupancy than decreased rental rates.

5   Most property managers are uncertain about how commute patterns may change in the
    coming year and are currently maintaining their transportation amenities until tenants’ future
    needs are clearer. However, an emerging trend to watch is an increase in bicycle storage
    among urban properties, likely a response to concerns about the safety of mass transit.

6   Opportunities exist for asset owners to better inform their tenants about transportation
    options through expanded individualized marketing and communication efforts.
TRANSPORTATION, OFFICE ASSETS, AND COVID-19: PROPERTY MANAGEMENT SURVEY RESULTS - THOUGHT LEADERSHIP SERIES JULY 2020
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SURVEY RESULTS
Transportation Concerns                                                    potential long-term increase in the number of teleworkers.
                                                                           Breaking down the level of concern by WalkScore category reveals
To gauge property managers’ concerns about office tenants
                                                                           that the levels of concern about each scenario vary greatly among
returning to work and their transportation needs, the survey
                                                                           properties depending on location. Please see the Methodology
presented seven different potential scenarios that could take
                                                                           section in the appendix for a full explanation of how WalkScore
place as a consequence of the COVID-19 pandemic and asked
                                                                           categories were calculated.
them to rate their level of concern. Respondents were asked
to categorize each scenario as something about which they                  Managers of properties in Car-Dependent locations are the least
are extremely concerned, moderately concerned, somewhat                    concerned about the provided scenarios: 62% of such properties
concerned, slightly concerned, or not concerned at all.                    are not at all concerned about increasing numbers of teleworkers,
                                                                           compared to 55% of all properties (see the exhibit below as well
Below are the scenarios ranked by level of concern:
                                                                           as Figure 4 in the appendix). It is logical that managers of Car-
1. Increased number of teleworkers (45%)
                                                                           Dependent locations, generally suburban properties, would be
2. Increased parking demand (25%)
                                                                           less concerned about teleworking, since suburban office assets
3. Increased traffic (23%)
                                                                           have seen an uptick in interest due to commuter wariness of
4. Decreased accessibility from public transit due to changing
                                                                           mass transit until a coronavirus vaccine is created—their lack of
    schedules or routes (21%)
                                                                           concern may not be tied to the properties’ ability to accommodate
5. Increased demand for bicycle-related infrastructure (17%)
                                                                           change but rather because they anticipate their space will be in
6. Increased usage of ride-hailing (8%)
                                                                           greater demand. More than a third (38%) of respondents were
7. Decreased usage of shuttles (5%)
                                                                           concerned about increased teleworking, making it the scenario
Overall, the managers of properties surveyed responded that                with the highest level of concern for properties in Car-Dependent
they are not acutely concerned about the seven scenarios; each             locations. The other scenarios, including increased parking
scenario was rated “not at all concerned” by at least 55% of               demand, all rank much lower in level of concern, probably
properties surveyed (see Figure 3 in the appendix). However,               because these Car-Dependent locations are already designed with
among all properties, the area of most concern was about a                 a high number of drivers in mind.

                  MANAGERS OF CAR-DEPENDENT PROPERTIES ARE LESS CONCERNED THAN
                     AVERAGE ABOUT THE POSSIBILITY OF INCREASED TELEWORKING

All Properties 2%           16%               16%                11%                                     55%

Car-dependent
               3%      9%            15%              11%                                          62%
    Properties

       Extremely Concerned         Moderately Concerned          Somewhat Concerned      Slightly Concerned       Not At All Concerned

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TRANSPORTATION, OFFICE ASSETS, AND COVID-19: PROPERTY MANAGEMENT SURVEY RESULTS - THOUGHT LEADERSHIP SERIES JULY 2020
Properties in the most walkable category, Extremely Walkable,       More than a third (38%) of all properties surveyed offer some sort of
were more likely to be concerned about the proposed scenarios       transportation amenity that supports commuting by a method other
(see Figure 5). More than half (61%) of properties in Extremely     than driving alone (see Figure 6). The three most common amenities
Walkable locations were at least slightly concerned about an        support biking to work: showers/locker rooms, bike storage rooms
increase in the number of teleworkers, compared to 45% among        and bikeshare stations. While less common, properties also reported
all properties. More than a third (39%) were also concerned about   providing shuttles to rail stations, reserved parking for carpool
decreased accessibility from public transit, compared to 21% of     vehicles, as well as nine other amenities.
properties overall. Additionally, properties in the most walkable   The availability of transportation amenities varies depending on the
places are more concerned about an increase in parking demand       WalkScore category of buildings’ locations (see Figure 7). Nearly a
compared to those in Car-Dependent locations: 32% of properties     third (32%) of properties in Car-Dependent locations offer amenities,
in Extremely Walkable locations were concerned about an uptick      whereas 43% of properties in Somewhat Walkable locations, 50%
in parking demand compared to only 18% in Car-Dependent             of properties in Very Walkable locations, and 42% of properties
locations. Walkable properties are likely accustomed to a larger    in Extremely Walkable locations offer transportation amenities.
percentage of tenants arriving by non-driving modes and may         Properties in Car-Dependent locations may be less likely to offer
not be prepared for an increased share of tenants commuting by      amenities to encourage non-driving commutes because their
single-occupancy vehicles, a possibility as commuters seek to       individual efforts may not be impactful in a community that lacks
better protect themselves from possible COVID-19 transmission.      multimodal transportation infrastructure. More walkable locations
                                                                    usually offer this type of infrastructure, which can support and
Transportation Amenities and Information                            augment individual buildings’ transportation amenities.
Transportation demand management (TDM) is an approach that
many commercial properties deploy to handle traffic and parking     Last-Mile Connections
challenges, some of which survey respondents believe could          Interestingly, 8% more properties in Very Walkable locations offer
occur due to the COVID-19 pandemic. TDM reduces travel demand       amenities than properties in Extremely Walkable locations. This
at specific sites by developing strategies for commuter behavior    may be because these properties are positioned slightly farther
change, as well as educating and encouraging commuters to           from transit connections and suffer from what is known as “last-
explore and utilize all of their transportation options in a safe   mile” connection problems. Many office buildings struggle with
and/or socially distant way. Reducing car trips by promoting        last-mile connections when they are situated too far from public
carpool, biking, walking, and using public transportation can       transportation for their tenants to comfortably walk to the site from
relieve pressure on a property’s parking infrastructure and         transit stops. Numerous NKF properties employ transportation
improve the quality of life for tenants by reducing traffic-        services, like shuttles to rail service, to help bridge this last-mile
related stress. In many cases, TDM strategies are positioned        gap. For instance, a majority of surveyed properties with shuttle
by properties as transportation amenities designed to promote       programs are greater than one mile from a rail station.
multimodality to the site.

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Bike Amenities                                                     Anticipated Changes to Transportation Amenities
Bike storage rooms are most popular in locations within a          The survey also asked about intentions to change the level of
quarter-mile of a rail station, perhaps because this amenity is    service for any existing transportation amenities due to the
most useful in locations that are more urban in design, have       COVID-19 pandemic, or whether properties planned on adding
more bike-friendly infrastructure, and a higher rate of biking.    any amenities that they do not currently offer. Overwhelmingly,
However, bikeshare stations are split between areas closest        properties that offer amenities plan to keep offering those
to a rail station and areas with no rail service; the popularity   amenities for the foreseeable future and at current levels of
of bikeshare stations near properties with no rail service may     service—without decreasing or increasing availability.
be due to the increase in smaller cities which lack rail service   Only seven properties said they were planning on adding new
implementing bikeshare systems. For example, NKF properties        transportation amenities. These properties were all located in
in Riverside, California, and Ann Arbor, Michigan, reported        Extremely Walkable locations except for one, which was located
having bikeshare stations on the premises.                         in a Somewhat Walkable location, and all seven said they planned
                                                                   on increasing support for bike storage rooms.
Transportation Communication
                                                                   Eleven properties reported that they planned on reducing or
Nearly half (46%) of properties surveyed reported                  eliminating transportation amenities. One property in a Car-
communicating with tenants about their transportation options      Dependent location is going to reduce ride-hailing support to
(see Figure 9), notably higher than the number of properties       train stations. Carshare is losing support from two properties;
offering amenities (38%) (although this is not surprising since    one property in a Car-Dependent area is planning to stop offering
properties can promote transportation options in their area        carshare parking altogether and one property in a Somewhat
without providing services on-site). Among all properties          Walkable area plans to reduce support for carshare parking.
surveyed, the most common method of communication was              Finally, eight properties plan on reducing their support for on-site
Email, with 35% of properties reporting that they send out         showers and/or locker rooms; four properties in Car-Dependent
transportation updates to their tenants. Website and Tenant        areas plan to reduce support for showers and/or locker rooms,
Portals are used to share this information by 10% of properties    two properties in more walkable areas (Somewhat and Very
surveyed. Only 35% of Car-Dependent locations actively             Walkable) are reducing support for showers and/or locker rooms,
communicate to their tenants about transportation whereas 57%      and two properties plan to stop offering showers and/or locker
of properties in the other, more walkable, WalkScore categories    rooms altogether. Interestingly, one property eliminating this
communicate about transportation. These more walkable              amenity is in a Car-Dependent location while the other is in an
locations may have more to communicate about, given that they      Extremely Walkable location.
tend to provide more transportation amenities and are situated
                                                                   On the whole, properties did not report that they were planning
in locations with more transportation options than their Car-
                                                                   on adding new transportation amenities. Due to the economic
Dependent counterparts.
                                                                   conditions and uncertainties associated with the COVID-19

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pandemic, property managers may be hesitant to budget for          surveyed (24%) are not sure how their occupancy rates will
capital improvements, and some may need to reduce costs. This      change. More than half (54%) of properties surveyed also
finding may reflect that property managers are uncertain about     reported they anticipate their rent rates will not change in the
when they will reopen or what commute mode changes may             next 12 months (see Figure 11), although 11% anticipate their
take place in the coming months—they do not want to overreact      rent rates will decrease. Almost a third (30%) of properties are
and spend capital unnecessarily, nor do they want to underreact    not sure how their rent rates will change. The relative lack of
and potentially lose tenancy due to insufficient amenities. The    anticipated change in both occupancy and rental rates could be
most common change reported is a reduction in transportation       because many tenants are signed to multi-year leases, which
amenities: carshare parking, ride-hailing, and showers/locker      will not be impacted within the next year. Another factor may
rooms are being reduced or closed in properties of all different   be the lack of clarity about how office tenants will react to the
WalkScore categories. However, one amenity stands out as           pandemic, with some seeking to maintain or even add space to
garnering additional interest; bike storage is the only amenity    accommodate social distancing for those in the office, while
receiving increased support in some Very and Extremely Walkable    others consider reducing their space requirements or placing
locations, perhaps reflecting the increase in biking during the    space on the sublease market as more employees telework.
pandemic which has been reported anecdotally. Biking enables       Properties in Car-Dependent locations are the least likely
people to socially distance and may be perceived as a safe form    to anticipate occupancy or rent rate decreases: only 12% of
of transportation during the pandemic.                             properties in Car-Dependent locations anticipate a decrease in
                                                                   occupancy rates and only 5% anticipate a decrease in their rent
Anticipated Changes to Occupancy and                               rates. This is consistent with the market’s current emphasis
Rental Rates                                                       on suburban locations, or hub-and-spoke office models, as
Finally, the survey asked property management professionals        more functional during a pandemic (see the adjacent exhibit
about their properties’ occupancy and rent rates, and what         as well as Figure 11 in the appendix). Properties in more
changes, if any, they anticipate over the next 12 months. More     walkable locations anticipate decreases in occupancy and rent
than half (54%) of properties surveyed reported that they          at higher rates, with a fifth of properties in Somewhat Walkable
anticipate their occupancy rates will not change in the next 12    and Extremely Walkable locations anticipating a decrease in
months (see Figure 11), although 17% are concerned that their      occupancy rates. For Very Walkable locations, this increases to
occupancy rates will decrease. Nearly a quarter of properties      a full third of properties. While properties in walkable locations

8 | © NEWMARK KNIGHT FRANK | RESEARCH | JULY 2020
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expect decreases in rent to a lower degree than they expect            nearly three quarters (74%) of property managers who said
decreases in occupancy, there is still a significant concern about     they anticipate occupancy will decrease are at least somewhat
rent: 11% of properties in Somewhat Walkable locations, 19% of         concerned about an increase in telework, while only a third (34%)
properties in Very Walkable locations, and 20% of properties in        of managers at properties that anticipate no change in occupancy
Extremely Walkable locations anticipate a decrease in rent over        are concerned about an increase in telework. Similarly, nearly a
the next 12 months.                                                    third (30%) of managers at properties that anticipate a decrease
                                                                       in occupancy are at least somewhat concerned about increased
Managers who anticipate a decrease in occupancy or rent rates
                                                                       parking demand, while only 18% of managers at properties that
at their properties are also more likely to be very concerned
                                                                       anticipate no change in occupancy are concerned about increased
about an increase in telework (see Figure 12) and transportation
                                                                       parking demand.
issues, such as increased parking demand, increased demand for
bicycle-related infrastructure, and increased traffic. For example,

                          EXPECTED OCCUPANCY CHANGE ACROSS WALKSCORE CATEGORY

WalkScore Category # of Properties

Car-Dependent               164                21%                                    64%                               3%      12%

Somewhat Walkable            44                     29%                             46%                        6%            20%

Very Walkable                28                      30%                        37%                                 33%

Extremely Walkable           64                    27%                           45%                         9%              20%

                         Not Sure of Impact                No Change      Increase Rate             Decrease Rate

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CONCLUSIONS AND RECOMMENDATIONS
                                     Based on survey results, properties in urban markets appear more likely to experience transportation-
                                     related impacts from the COVID-19 pandemic than similar properties in less urban contexts. Strategies
                                     currently being deployed in both urban and suburban contexts are informative for how properties can
                                     prepare for changing conditions related to the ongoing COVID-19 pandemic. Possible strategies include
                                     the following:

                                     For all properties, asset owners and their property managers may wish to:

                                     •    Develop a communications plan to educate tenants about their transportation options during
                                          COVID-19 (regardless of whether the property provides transportation amenities) to encourage safe
                                          use of multimodal transportation during and after the pandemic.

                                     •    Consider increasing bike storage to improve connectivity and support multimodal transportation.

                                     For urban properties, asset owners and their property managers may wish to:

                                     •    Consider expanding transportation amenities such as on-site bicycle storage and bikeshare/
                                          scooter-share stations to enhance connectivity and remain competitive with more suburban
                                          properties, which are less likely to face parking shortages and other transportation concerns.

                                     •    Develop a communications plan about how to safely commute to work with social distancing via
                                          transit, shuttles and carpools. They may also wish to review with tenants the COVID-19 safety
                                          precautions being taken by the building, such as the cleaning protocols of transportation amenities
                                          or local bike/scooter share stations.

                                     •    Increase transportation amenities that solve last-mile challenges, such as shuttle or ridehailing
                                          services to nearby public transit stops, particularly for those assets with a WalkScore between
                                          50 and 89 or located between a half-mile and 1.5 miles from a transit station.

                                     •    Incentivize tenants to carpool by creating reserved carpool spaces closer to building entrances
                                          and/or providing these spaces at free or reduced rates.

                                     •    Re-examine meeting and collaboration spaces; larger and more flexible meeting spaces can confer
                                          a competitive advantage in the current environment.

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METHODOLOGY
To gauge the concerns of property managers related to COVID-19                  NKF manages properties in markets around the country, including
and transportation, Newmark Knight Frank partnered with Wells                   urban, suburban, and exurban locations. WalkScores were
+ Associates to distribute a survey to managers of NKF’s office                 considered as part of the analysis. (WalkScore assigns a score
portfolio. These management professionals are attuned to both                   from 0–100 to measure the degree of walkability in an area.
the needs of their tenants and their investor-owner clients, giving             The methodology analyzes walkability of an area; the higher
their opinions a unique and insightful position in the commercial               the WalkScore for an address, the more amenities an individual
real estate industry. The survey was completed in May and                       can walk to in a shorter amount of time.) Using ratings from
June 2020 by managers representing 300 properties across the                    WalkScore, the properties surveyed were broken into categories
country, approximately 67% of the NKF office portfolio. The survey              based on degree of walkability to approximate each site’s level
asked property managers at NKF properties about:                                of urbanity. Using the individual scores, surveyed properties were
                                                                                organized into four categories: Extremely Walkable (90–100),
•      The types of transportation amenities the building provides
                                                                                Very Walkable (70–89), Somewhat Walkable (50–69), and Car-
       to tenants and if they plan to make any changes over the
                                                                                Dependent (0–49). Extremely Walkable locations do not require
       next 12 months;
                                                                                a car for daily errands, Very Walkable locations do not typically
•      Whether they actively communicate with tenants about                     require a car, Somewhat Walkable locations require a car for some
       transportation;                                                          errands, and Car-Dependent locations require a car for most or
•      What transportation-related concerns they may have at their              all errands. Survey results were analyzed using these WalkScore
       property; and                                                            categories to gain deeper insight into the ways in which buildings
                                                                                in different types of locations are being differentially impacted by
•      How they see the pandemic impacting their rents and
                                                                                COVID-19 and its associated transportation challenges.
       occupancy rates over the next 12 months.

SOURCES:
ASSOCIATION FOR COMMUTER TRANSPORTATION, CENTERS FOR DISEASE CONTROL AND PREVENTION, THE GUARDIAN,
NKF RESEARCH, WALKSCORE, WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY, WELLS + ASSOCIATES

LEADERSHIP OF SURVEY PROJECT:
       NEWMARK KNIGHT FRANK                                      WELLS + ASSOCIATES
                      Dan Orcutt                                           Camille Galdes
           Director, Management Services                                 Research Associate

              Alexander (Sandy) Paul                                       Matthew Holden
    Senior Managing Director of National Research                           Data Scientist

                    Chris Prather                                              Nick Kosar
           National Director of Operations                            Digital Marketing Strategist

                   Sam Willger                                              Justin Schor
              Senior Graphic Designer                         Principal, Planning + Market Research

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Key exhibits are cited in the preceding narrative; others are included here for additional context on the
APPENDIX                               sample of properties surveyed and property managers’ reactions to the current office market environment.

                       FIGURE 1: GEOGRAPHIC DISTRIBUTION AND NUMBER OF RESPONSES
                                       OF NKF PROPERTIES SURVEYED

    San Francisco                                                                                                                        31
      Northern NJ                                                                                           23
      Philadelphia                                                                            19
            Denver                                                                     17
   Washington DC                                                             14
         NY Metro                                                            14
        Wisconsin                                                       13
            Detroit                                                     13
     Salt Lake City                                               11
      Los Angeles                                            10
            Florida                                          10
         SW Texas                                     8
            Dallas                                    8

              Ohio                                7
        Pittsburgh                            6
           Phoenix                            6
        Columbus                              6
          Portland                     4
          Chicago                      4
      Minneapolis                  3
         Memphis                   3
      Connecticut                  3
        Las Vegas              2
            Boston         1
           Atlanta         1

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FIGURE 2: ALL SURVEYED PROPERTIES CATEGORIZED BY WALKSCORE

      57%

                                                            20%
                        13%
                                         11%

 Car-Dependent   Somewhat Walkable   Very Walkable   Extremely Walkable
      0–50            51–69             70–89             90–100

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FIGURE 3: LEVEL OF CONCERN ABOUT POTENTIAL SCENARIOS,
                                         AMONG ALL PROPERTY MANAGERS

      Decreased Usage
                           3%                                                  95%
            of Shuttles

    Increased Usage of
                             6%                                                 92%
           Ride-Hailing

 Increased Demand for
        Bicycle Related    4%         12%                                             83%
         Infrastructure

Decreased Accessibility
                              7%            12%                                        79%
    from Public Transit

      Increased Traffic         7%           13%                                        77%

     Increased Parking     3%      7%         13%                                           75%
              Demand

    Increased Number                 16%              16%         11%                               55%
        of Teleworkers

         Extremely Concerned            Moderately Concerned   Somewhat Concerned     Slightly Concerned   Not At All Concerned

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                            FIGURE 4: LEVEL OF CONCERN ABOUT POTENTIAL SCENARIOS,
                                AMONG MANAGERS OF CAR-DEPENDENT PROPERTIES

      Decreased Usage
                                                                                    98%
            of Shuttles

    Increased Usage of
                                                                                     97%
           Ride-Hailing

 Increased Demand for
        Bicycle Related        7%                                                          91%
         Infrastructure

Decreased Accessibility
                          4%        6%                                                     89%
    from Public Transit

      Increased Traffic     6%           8%                                                      84%

     Increased Parking
                            4%           11%                                                     82%
              Demand

    Increased Number
                       3%       9%              15%             11%                                         62%
        of Teleworkers

         Extremely Concerned             Moderately Concerned         Somewhat Concerned          Slightly Concerned       Not At All Concerned

                                                                                                                       THOUGHT LEADERSHIP SERIES | 15
FIGURE 5: LEVEL OF CONCERN ABOUT POTENTIAL SCENARIOS,
                             AMONG MANAGERS OF EXTREMELY WALKABLE PROPERTIES

      Decreased Usage
                           7%                                                    93%
            of Shuttles

    Increased Usage of
                        4%         14%                                                  82%
           Ride-Hailing

 Increased Demand for
        Bicycle Related         12%             14%                                           72%
         Infrastructure

Decreased Accessibility
                        4%         14%                     21%                                      61%
    from Public Transit

      Increased Traffic          11%                 18%                                       68%

     Increased Parking    5%          11%             14%                                      68%
              Demand

    Increased Number                      28%                      18%            14%                        39%
        of Teleworkers

         Extremely Concerned         Moderately Concerned        Somewhat Concerned     Slightly Concerned   Not At All Concerned

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                  FIGURE 6: TRANSPORTATION AMENITIES OFFERED
                             ACROSS ALL PROPERTIES

         Shower Locker Rooms               23%                                   77%

             Bike Storage Room           15%                                   85%

              Bikeshare Station     6%                                   94%

                  Shuttle to Rail   4%                                  96%

      Carpool Reserved Parking                                         97%
62%

            Bikeshare Dockless                                         98%

        Designated Ride-Hailing
                                                                       99%
                Pickup Dropoff

               Real-Time Transit
             Information Screen                                        99%

               Shuttle to Lunch                                        99%

              Carshare Parking                                        99%

            E-scooter Dockless                                        99%

38%   Property Paid Ride-Hailing
                                                                      99%
           Between Rail Station

        E-scooter Charging Hub                                        100%

      Property Paid Ride-Hailing
        Between Site and Lunch                                        100%
                   Destinations

                    Property Offers an Amenity   Property Does Not Offer an Amenity

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FIGURE 7: TRANSPORTATION AMENITIES OFFERED AT
                                        PROPERTIES BY WALKSCORE CATEGORY

                                                          54%                   50%
                                                                                                        58%
                                68%

                                                          46%                   50%
                                                                                                        42%
                                32%

                           Car-Dependent         Somewhat Walkable        Very Walkable         Extremely Walkable
                       Property Offers no Transportation Amenities   Property Offers at least One Transportation Amenity

                                 FIGURE 8: PROPERTIES BY WALKSCORE CATEGORY AND
                                              DISTANCE TO RAIL TRANSIT

                                                                                                        6%

                                                                                29%
                                                         44%
                                                                                                        36%
                                62%

                                                                                32%

                                                         39%
                                                                                                        58%
                                31%
                                                                                39%

                                                         17%
                                7%
                          Car-Dependent          Somewhat Walkable         Very Walkable        Extremely Walkable
                                  No Rail Transit in the Area    Greater than 1/4 Mile       Within 1/4 Mile

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              FIGURE 9: RATES AND TYPE OF TRANSPORTATION COMMUNICATIONS,
                           AMONG MANAGERS OF ALL PROPERTIES

54%
              65%

                               90%              91%
                                                              96%              96%
                                                                                                99%                 99%

              35%
46%

                               10%              9%
                                                               4%              4%

              Email       Website/Tenant   Other (Leasing    Display          Flyers           Social             Text
                             Portal         Guide/App)       Screens                           Media            Messages

      Property Does Not Communicate About Transportation    Property Communicates to Tenants About Transportation

                                                                                               THOUGHT LEADERSHIP SERIES | 19
FIGURE 10: ANTICIPATED CHANGES IN TRANSPORTATION AMENITIES,
                                    AMONG MANAGERS OF ALL PROPERTIES

           Shuttle to Rail      1.2%

         Carpool Parking          2.4%

      Ride-Hail to Station        1.2%

       Real-Time Display          2.4%

        Carshare Parking            1.2%

         Shuttle to Lunch              4.9%

             Designated
                                              9.8%
        Ride-Hailing Spot

        Bikeshare Station                            13.4%

      Bike Storage Room                                      41.5%                         8.5%

   Shower Locker Rooms              7.3%                                           63.4%

               Stop Offering           Decrease Support/Availability   Keep Offering at Same Level   Increase Support

20 | © NEWMARK KNIGHT FRANK | RESEARCH | JULY 2020
TOC

                     FIGURE 11: ANTICIPATED CHANGES IN OCCUPANCY AND RENT RATES
                          WITHIN THE NEXT 12 MONTHS BY WALKSCORE CATEGORY

                                                                                                                11%
                                                                   17%
                                            24%                                                                           5%
                                                                                       30%

                                                       Occupancy                                         Rent
                                      4%                 Rate                                            Rate

                                                                   54%                                                 54%
WalkScore Category # of Properties

Car-Dependent            164          12%             64%            21%                     59%                  7%           29%

Extremely Walkable        64           20%           45%      9%    27%          20%               48%               4%        29%

Somewhat Walkable         44           20%           46%            29%        11%            51%               3%         34%

Very Walkable             28                33%         37%         30%          19%               48%                     33%

                      Decrease Rate               No Change          Increase Rate           Not Sure of Impact

                                                                                                         THOUGHT LEADERSHIP SERIES | 21
FIGURE 12: RATES OF CONCERN ABOUT POTENTIAL SCENARIOS
                                    BY EXPECTATION ABOUT OCCUPANCY RATES

Anticipates      Decreased Usage of Shuttles          7%         5%                                 86%
Occupancy
will Decrease
                 Increased Usage of Ride-Hailing            7%                                    88%

                 Increased Demand for Bicycle
                 Related Infrastructure                      14%             14%                           70%

                 Decreased Accessibility from
                                                       5% 5%           14%                                74%
                 Public Transit

                 Increased Traffic                    7%         9%         12%                            72%

                 Increased Parking Demand              9%             14%         7%                       70%

                 Increased Number of Teleworkers                        40%                   26%                9%             26%

Anticipates      Decreased Usage of Shuttles                                                98%
Occupancy
Will Stay the
Same
                 Increased Usage of Ride-Hailing       5%                                      93%

                 Increased Demand for Bicycle
                 Related Infrastructure                 8%                                      90%

                 Decreased Accessibility from
                                                            8%                                    89%
                 Public Transit

                 Increased Traffic                           12%                                    84%

                 Increased Parking Demand                    14%                                     82%

                 Increased Number of Teleworkers        12%           10%          11%                      66%

        Extremely Concerned          Moderately Concerned          Somewhat Concerned    Slightly Concerned           Not At All Concerned

22 | © NEWMARK KNIGHT FRANK | RESEARCH | JULY 2020
TOC

                         FIGURE 13: RATES OF CONCERN ABOUT POTENTIAL SCENARIOS
                                     BY EXPECTATION ABOUT RENT RATES

Anticipates Decreased Usage of Shuttles       4% 4% 4%                                          88%
Rent will
Decrease
            Increased Usage of Ride-Hailing   4% 4% 4%                                          88%

            Increased Demand for Bicycle
            Related Infrastructure            4%        12%             19%                               65%

            Decreased Accessibility from
            Public Transit                    4% 4%           12%           15%                           65%

            Increased Traffic                  8%         8%           15%                              69%

            Increased Parking Demand           8%       4%      12%          12%                          65%

            Increased Number of Teleworkers                           42%                12%            23%                    23%

Anticipates Decreased Usage of Shuttles                                                    97%
Rent will
Stay the
Same
            Increased Usage of Ride-Hailing        7%                                          92%

            Increased Demand for Bicycle
            Related Infrastructure                      11%                                      86%

            Decreased Accessibility from
            Public Transit                    6%         11%                                     83%

            Increased Traffic                 4%        12%                                      84%

            Increased Parking Demand          4%         11%                                     83%

            Increased Number of Teleworkers         14%              11%      7%                         67%

       Extremely Concerned       Moderately Concerned               Somewhat Concerned   Slightly Concerned       Not At All Concerned

                                                                                                               THOUGHT LEADERSHIP SERIES | 23
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