Terrorism and the Realm of Possibility in Property Management

Rutherford: “Looking at the most recent attack in San Bernardino, if this is the ‘new face of terrorism,’ then the impacts are not going to be on expenses as much as they will be on preparation and planning.”

COSTA MESA, CA— Property managers , owners and tenants need to know how to respond in the event of a first-person shooter or bomb, Trestle Property & Association Management ‘s co-founder Luke Rutherford tells GlobeSt.com. In light of recent terrorist events , including the mass shooting in San Bernardino, CA, we spoke exclusively with Rutherford about how terrorist attacks have affected commercial real estate property managers, what they should know about risk management and how landlord expenses are impacted. GlobeSt.com: How have the recent terrorist attacks impacted the role of the commercial real estate property manager? Rutherford: The impacts of the recent terrorist attacks change the realm of “what’s possible” at a commercial property. If we learn from the past to forecast and respond to what’s possible in the future, then property managers, owners and tenants need to know how to respond in the event of a first person shooter or bomb. What that involves is working with owners and tenants to address an emergency action plan. If tenants and property owners know how to respond in the event of an emergency, then they can better save their own lives and lead visitors in the escape process. After evaluating what’s possible at your property, the next step is the planning stage, wherein you perform an evaluation of the specific property under consideration ( industrial vs retail vs office vs condo owners’ association). Considering the factors of each property use will aid in the development of an Emergency Action Plan. The wealth of factors to mitigate in an EAP for every product or use type is endless. For example, have a look at the genetic make-up of office use: multiple floors, common interior hallways, elevators, stairs, common access control systems (exit and entry for front and interior doors) and park/campus vs single building/parcel. Also, study the factors inherent with industrial: loading-dock doors (often open), storage (chemical), and trailers (think bomb) in loading docks. All the factors that make up industrial and office are included under the umbrella of “retail.” It’s just that retail encompasses a broader spectrum of foot traffic and visitors. Every “use” has a different factor to consider in developing an EAP. Once you consider the possibility of a shooter or bomb threat, identify the characteristics of your property, and start asking questions that may come up in an emergency. How do you report a shooting, fire or bomb? Do you contact 911? Do you contact the property manager? How do you stop the flow of people coming to your property? Do you lock the doors (roll-up or otherwise) to your building? Do you avoid cars/trucks/trailers if there is a bomb? Protecting life is priority in any EAP. The US Department of Homeland Security explains the process of protecting your life as follows:

1. Evacuate. If there is an accessible escape path, attempt to evacuate the premises.
2. Hide out. If evacuation is not possible, find a place to hide where the active shooter is less likely to find you. Lock yourself in a room and barricade the door.
3. Take action against the active shooter. As a last resort, and only when your life is in imminent danger, attempt to disrupt and/or incapacitate the shooter.

Once you protect your life, the next most important thing is to call 911 for help. GlobeSt.com: What advice do you have for owner/investor of commercial real estate when it comes to risk management? Rutherford: From a property perspective, owners and investors need to pay close attention to their insurance policies and verify their property has coverage in the event of a terrorist attack. Many insurance policies exclude terrorism coverage, but oftentimes for an additional $100 per year you can bind terrorism coverage. Consider the possibility of a bomb resulting in a fire and the fire causing your fire protection sprinklers to go off. The moment fire sprinklers go off, you are easily looking at $100,000 in water damage, and that does not even address the property or structural damage the bomb is sure to cause. GlobeSt.com:   Why is risk management important to tenant attraction and retention? Rutherford: Well-prepared property owners (with related plans for safety and property coverage) add value and trust to the owner/tenant/property manager relationship. Clear communication on how to manage terrorist threats with corresponding action plans saves lives, limit property damage and ensures tenants can continue to operate their businesses. Safety and protection are paramount in an enduring tenant relationship. GlobeSt.com: How have landlord expenses been impacted by the recent attacks? Rutherford: I think the most recent terrorist attack changes the reality of what to expect from a terrorist attack. The idea of “crowd sourcing” terrorism being many, small attacks is a lot different from the large-scale attack we saw on 9/11. Contemplate the changes 9/11 brought to the insurance industry, government, air travel and security (foreign and domestic) industries. I don’t know how you quantify or funnel those costs down to a landlord. However, looking at the most recent attack in San Bernardino, if this is the “new face of terrorism,” then the impacts are not going to be on expenses (assuming you manage your risk) as much as they will be on preparation and planning. It’s apparent landlords and property managers need to have the right communication and Emergency Action Plan in place across all commercial assets (large or small).