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Expected Rise In DFW Coronavirus Hospitalizations Complicates CRE's Reopening

North Texas is open for business, but property managers and landlords wonder for how long with UT Southwestern Medical Center physicians predicting a 20% jump in coronavirus-related hospitalizations over the next two weeks. 


Texas recorded more than 5,000 new cases of the coronavirus Tuesday, the most ever in a single day. Hospitalizations have been breaking records daily for more than a week, according to the Dallas Morning News. Tuesday was also a record high for Dallas County, which reported 445 positive tests and 72 new hospitalizations.

“Today’s number of hospitalizations and new COVID-19 cases continues a disturbing trend of a surge of a second wave increase of COVID-19,” Dallas County Judge Clay Jenkins said in a statement Wednesday, following the announcement of 391 new cases.

For commercial real estate professionals, the next 14 days are a harbinger for what's to come. If cases continue to surge, will commercial premises remain open, shut down altogether or land somewhere in the middle of the two extremes with buildings open but tenants staying home? 

“I think it's on the back of everybody’s mind as we see a resurgence of cases and hospitalizations ...,” Younger Partners Property Services President Greg Grainger said. “There’s always that option that the governor could issue orders mandating [for everyone] to stay at home again.”

Even before cases started spiking in DFW in the last week, tenants had yet to fully return to the workplace, Grainger said. He estimates 75% of tenants returned to the office prior to the recent outbreak, but only 25% of their actual workforce came back with them

Flip Howard, CEO of coworking brand WorkSuites, said it's too early to determine whether state and local leaders intend to impose mass shutdowns on DFW residents and businesses to curve the virus's growth, but it remains in the realm of possibility. His own coworking brand saw daily occupancy fall to the sub-10% range in the last few months before picking up to 50% to 60% in recent weeks. 

A shutdown would derail the coworking giant's daily traffic again.

“Yes, we are worried about that,” Howard said. “I believe that would only happen if the deaths and hospitalizations were to see dramatic rises. But, if it turns out that you could literally save a lot of lives by doing it, I think we might do it again.”

Empty streets and empty commercial buildings are wreaking havoc on real estate companies.

Texas Gov. Greg Abbott warned Texans about a record-setting 5,000 new cases this week and a need to follow recommended protocols, CBS DFW reported. Hospitals are currently treating 4,000 positive patients, the same report said. North Texas has roughly 14,772 active cases, according to data from NBC5i in Dallas.

Abbott's public recommendations this week left more room for local officials to impose stricter enforcement guidelines on cities and counties, and Dallas County soon after mandated the wearing of face masks in public spaces.  

“Most properties that I have seen require masks to be worn by property employees and property vendors,” Grainger said. “The challenge has been with our tenant customers and trying to get them to do the same thing for their employees and vendors.”

Dreien Opportunity Partners CEO Sam Ware said The Campus at Legacy West project is following all recommended protocols to keep people safe. While Ware said he supports ongoing safety measures, he fears another shutdown could push commercial real estate owners into a deeper ditch of uncertainty. 

“We cannot afford to close again, it will bankrupt lots of projects, cities, counties and millions of businesses,” Ware told Bisnow. “It will make the current damage five times-plus [what it is]. We must learn to test and isolate, and it will get under control.”

Property owners and managers hope protocols inside commercial office buildings will curtail the threat of the coronavirus itself and thwart the need for more closings.

“From our standpoint in working through the properties and the protocols that are in place, we are hoping those will help mitigate or at least slow down the relative transmission of COVID within the office place,” Grainger said. 

Ware's redeveloped The Campus at Legacy West is now promoting the suburban office campus for its ability to offer open-air staircases, which allow visitors and guests the ability to navigate the building without ever touching an elevator.

“Unlike 99% of the office buildings out there, we have the perfect COVID-19 design,” Ware said. “Three stories, massive floor plates ... and massive open staircases to the second and third floors.”

The building also has escalators to its lower levels. 

“You never have to get on an elevator again,” Ware said. “We think this will be a huge draw for corporate relocations.”