It’s been interesting times for commercial properties these past few years. Shutdowns early in the COVID-19 pandemic were soon followed by a surge in sales. Then, as interest rates rose, demand for commercial real estate began to drop off.
While that industry’s tumult was capturing the headlines, however, an adjacent one kept calm and carried on. Facilities services, the business of handling building upkeep, is a strikingly resilient corner of the economy. The pandemic’s outbreak emptied buildings, but commercial property owners and managers still needed to maintain them. Public health measures limited occupancy, but cleaning and sanitation became more important than ever.
In this Executive Insights, we examine the key priorities for facilities management in a post-COVID-19 world, and we discuss the importance determining the right operating strategy for building scale within this dynamic market.
The building outsourcing opportunity
Facilities services includes a host of activities and service providers that help manage the construction, operation and maintenance of commercial facilities. (It doesn’t include major renovations or the installation of materials in new construction projects.) Services span the full asset life cycle, from commercial development to maintenance services, building operations and management. By 2019, this set of disparate markets added up to a $600 billion industry. Roughly half is in maintenance and repair, with another 35%-40% in operations management (see Figure 1).