In the last year, many customs, companies, and people have fallen victim to a merciless shared enemy: COVID-19. Commercial property owners have been some of the hardest-hit, as high transmission rates prompted companies to adopt primarily remote work cultures and forced restaurants, hotels, and theaters to close.
Even as hope arrives in the form of an aggressive vaccination campaign, worrying traces of COVID’s legacy remain. According to a December 2020 Bloomberg article, “Companies are already deciding they’ll need less office space than before, either because of staff cutbacks or because more of their employees will permanently work from home. And the rise of e-commerce — along with small business closures — will create a glut of retail space in a country that already had too much of it.”
Continued remote work and increased reliance on delivery may be safe and convenient for individuals, but what does it mean for commercial property owners? For cities? For once-thriving communities?
Revitalizing areas most affected by the pandemic requires creative restructuring of real estate. However cities and towns choose to rejuvenate their communities — through rezoning, for example, or new ownership — they need easy access to clear title information. Title is an essential tool for cities and states as they seek to revitalize their communities.
The State of Commercial Real Estate
In the months and years preceding the pandemic, companies across the country were expanding their physical footprints. In early March of 2020, Amazon bought the historic Lord & Taylor building in Midtown Manhattan. In 2018, REI began building a showstopping eight-acre campus outside Seattle. Though company leaders often theorized about an eventual shift to remote work, few companies actually adopted a remote-first structure.
Over the last year, things have changed.
In September of 2020, REI sold its never-used campus to Facebook. Reuters analysis “revealed more than 25 large companies plan to reduce their office space in the year ahead.” Remote work became a way of life, and as fewer people commuted into urban areas for work or play, some proclaimed the death of the city.
Long Live the City
Restructuring and repurposing real estate can rejuvenate struggling areas and provide new incentives to invest in existing real estate. In these instances, easy access to clear title information becomes very important. New owners need clear ownership — and any problems with title can hinder rejuvenation. In each of the following cases, title is a critical part of the revitalization process.
Uniting and Dividing Land
In a changed and changing world, multiple parties seek to restructure land and its use. When multiple parcels of land are united (e.g., if a company buys up multiple different locations within a mall) or divided (e.g., if a large swath of land needs to be subdivided), individual titles are required. In the former process, a new owner will need individual titles for each property s/he purchases, even if the end result is a single unified property. When land is subdivided, each subdivision also requires its own title. Inefficient or unclear access to title can slow the purchasing process, which can delay a community’s recovery.
Re-Zoning
One way to revitalize an area once dominated by now-empty workspaces? Aggressive re-zoning. Indeed, some parties have proposed re-zoning formerly business-heavy areas of cities like Manhattan, so unused and little-used buildings can be repurposed.
According to a November 2020 Bloomberg CityLab article, “some see an opportunity for [New York] to rethink the role of this workspace-laden swatch of the city by converting idled office space into new residential projects, especially affordable housing.” Proponents point to similar initiatives that followed the September 11th attacks and the Great Recession. In the wake of those crises, according to Paimaan Lodhi, senior vice president of the Real Estate Board of New York, “Roughly 25,000 nonresidential units have been added during that period. By converting Class B and Class C office space, [the] 421-g [tax incentive program] turned a neighborhood dead outside of 9-to-5 working hours to become a true live-work-play neighborhood.”
Similar conversions could reinvigorate struggling spaces in today’s cities. For conversions to happen expediently, buyers and sellers need easy access to clear title. For example, if a hotel is subdivided into multiple units or converted to a condo, each unit will need a title. Problematic title access can delay — or derail — such an initiative.
Streamlining the Purchasing Process
When property changes hands for any reason, title is essential in simplifying and expediting the purchasing process. A lack of clear title can lead to confusion, disputes, and expensive litigation.
Many counties maintain title records. If they store hard copies or microfilm of these documents, they subject their records to potential damage by water, sunlight, or human error. A cloud-based interface could reduce problems and delays due to damaged or lost documents, but many counties have not yet digitized their records.
To simplify the purchasing process and protect themselves, parties should work with a title company that can identify issues in the diligence process before they arise. With a service like Pippin’s, each party can conduct comprehensive research and easily gain access to important information. When such purchases are as important to individuals, companies, and entire communities as they are today, contracting parties would do well to streamline and expedite the purchasing process as much as they possibly can.
Title: An Unsung Hero in Community Rejuvenation
COVID has catalyzed change in countless ways and shifted our collective perceptions of property and space. Throughout the nation, struggling communities strive to reinvent and reinvigorate themselves by restructuring and repurposing commercial property. In some places, the long-term survival of the city may depend on the ease and speed with which this revitalization occurs.
Title can help — and so can we. Pippin makes the notoriously laborious title search process fast and easy with our user-friendly platform that offers a one-stop-shop for nationwide title searches and reports. With Pippin in your toolbelt, you can conduct research more easily and gain confidence in your diligence process. Armed with the information and resources you need, you can move forward with your purchase — and rejuvenate a community in the process.
Ready to simplify your title search? Leave us a message here to learn more, or you can contact me directly: [email protected].
