The 2008 housing crash has nothing on the coronavirus pandemic, according to Mike Zucker. “This has been the hardest two weeks in the last 20 years,” the CEO of Peak Properties LLC, a property management and investment firm serving Chicagoland, told Chicago Agent magazine. “We’re 50% property manager and 50% psychiatrists and psychologists right now.”
Planning for the unexpected
While Peak Properties does have disaster preparedness procedures for its buildings, much of these documents focus on more common threats: fires, floods and crimes that may occur on the premises. “Everything you could think of except for rampant, infectious disease,” Zucker said, adding that he “did not think someone getting sick somewhere in China” would have this impact on the company’s tenants, staff and agents.
Still, Peak Properties got a head start on the current crisis because Zucker sprang into action relatively early. He noted that he was already “nervous” about the situation in the last week of February and had sent most staff to work from home by the first week or March. “We started preparing for this a month ago,” he recalled. “We were a week or two ahead of everybody else.”
A positive case
One of the biggest disaster management tests for people in Zucker’s line of work these days is dealing with a confirmed case of the novel coronavirus in their buildings, a situation that Peak has already had to handle for one resident in one of their multifamily buildings.
While Zucker noted that property managers may not be under any legal obligation to let other tenants know, he said it’s better to err on the side of sharing too much rather than not offering enough information. “We’ve been really proactive with our communication,” he said. “The biggest mistake a property manager could make right now is to not communicate effectively with their residents.”
Peak notified all tenants that someone in the building had tested positive and that they were self-quarantining, though Zucker did note that it’s important to follow patient privacy procedures and not identify the person who was diagnosed or what unit they live in. The company also told residents about the special cleaning and disinfecting procedures that maintenance staff would undertake to mitigate the spread of the virus.
While most of the company’s communications with tenants are emailed through a communication platform provided by property management software Yardi, Zucker did note that property managers have gone out to knock on the doors of any elderly residents they have to make sure they’re OK and up to date on the latest.
Zucker and his team have now put together documentation and guidance on how to deal with the situations they hadn’t known to prepare for before. They’ve crafted procedures for cleaning and disinfecting, how to handle new leases under the governor’s “stay at home” order, what to do if a tenant is diagnosed with the virus and how to distinguish between emergency maintenance calls and those that can wait until social distancing rules are eased.
Keeping the company, renters, staff and agents secure
Zucker expressed grave concerns for small landlords and property management companies overall during this crisis. While he expects his company will be at around 95% rent collection for April, that might fall as low as 85% the following month. He added that many of his colleagues in less stable marketplaces might be closer to the 70% mark in April. “What’s everyone going to do for rent?” he asked. “Many people think that landlords are wealthy, [but] when you own a two-flat, you have to pay your mortgage. None of that is stopping.”
Zucker did note that the stimulus measures passed by Congress will help. Not only are many Americans going to get a $1,200 check from the federal government, but those who file for unemployment will get an extra $600 a week in many cases. Also, Mayor Lori Lightfoot announced a COVID-19 housing assistance program to assist those who have been impacted by the economic fallout from the pandemic with 2,000 grants of $1,000 each to go toward rent or mortgage payments.
Zucker recommended landlords reach out to tenants and make each party understand the predicament the other is in. “You want to be empathetic; you want to be sympathetic,” he said. “You want to explain to them [what it looks like] on the other side of the coin.”
While Zucker does “not recommend offering rent abatement unless you can afford to,” Peak Properties does have specific forms and a process in place to deal with issues of rent payment. Tenants need to show some form of proof that they’ve been laid off or furloughed, as well as their application for unemployment with the state. Their typical rent deferment program for a person paying $1,200 a month in rent is to ask the tenant to pay $600 now and sign a one-year lease renewal at the same monthly rate they’re paying now. They’ve waived all late fees, rent increases and interest payments, and layer the remaining $600 into a payment plan.
While he wants the process to be as flexible and stress-free for tenants as possible, he still has his own employees, contractors and agents to think about. Peak Properties hasn’t had to face the situation of furloughing or laying people off, but there are no guarantees in terms of how long this state of emergency may last.
Supporting both staff and agents is clearly a priority for Zucker, though he’s careful not to toot his own horn. The vast majority of people working at Peak Properties are doing so from home; a rotating group of upper management folks are checking in at the office to sign documents, get the mail and accomplish other critical, in-person tasks for the business. The company has doubled down on its existing commitment to making it as easy as possible for staff to work from home.
“We’re trying to give everyone all the tools necessary to get their jobs done,” Zucker said. “I’m really encouraging everyone to know that they have a safe place. … I need them to feel comfortable.”
For agents, it’s a matter of keeping their pipeline as full as possible. “We do have the resources available for them to rent the apartments virtually,” he said. “They need to make money. That’s the truth.”
Keeping spirits high
While handling rent issues, getting associates what they need to carry on, and maintaining safe living environments for the 15,000 residents his company houses are at the top of the list for Zucker, he’s also got his eye on the mental health of the Peak Properties family. He’s been sending emails to associates with stress-reduction and exercise techniques, and reminding everyone to take a minute to breathe deeply and reflect on what matters most whenever possible.
The one thing he’s not saying is that the end is in sight. “People are sick of hearing that this will pass,” Zucker said. “My advice is there’s only one way to get through hellfire, and it’s to walk right through it. … Keep your chin up and we’ll fight for another day.”