At the end of 2019, I was offered the opportunity to take part in the divestment of the biggest asset in Skanska history: 2+U in Seattle, US (over 65,000 sqm). Previously, thanks to working for the global Skanska Group I already had a chance to work on divestments in London, UK and Helsinki, Finland but this time I was invited to share my divestment experience with our American colleagues. Before the trip to Seattle, I spoke to one of my colleagues from Microsoft who was there just two weeks earlier. He said that travelling was no different than before.

Indeed, Seattle seemed safe at that time with only a few COVID cases and life and business were going on as usual. The Public Market Centre was packed and fish mongers were showing off their fish to attract customers. There was a line outside the Amazon Spheres visitor centre. I have been there almost a week with my Skanska colleagues, we have spent this time mostly on interviews with brokers to represent us in this deal. Personally, I was shocked at how quickly I connected with the local Skanska team, their amazing culture of inclusiveness and great experience. Many thanks to McCullough, Murphy and the team for such a warm welcome! Unfortunately, it was not official then yet but when we were working together on 2+U, the virus started to spread in Seattle. And that was just the dawn of the pandemic.

                   Seattle was busy as always & seemed normal during my visit in February 2020.

TRANSACTIONS AGAINST ALL ODDS

I never thought this would be my last air trip until today, not only inter-continental but also international. I was supposed to be back for the 2+U sales process before the summer, but soon after my trip travel restrictions were gradually introduced globally, and Seattle became one of the first pandemic centres in the US. Moreover, just after my return on March 4th, the first coronavirus infection was announced in Poland. And I had two transactions going on at that time in CEE, one with Deka in Warsaw and another with S IMMO in Bucharest, and I was wondering if and how we would be able to complete them in order to meet our business targets. 

Pretty fast, all our work moved to the untapped territory of the virtual world. Zoom and Microsoft Teams calls became our new normal instead of regular meetings and phone calls. After some discussions with Deka we agreed on the way forward and amidst all the physical limitations we moved on to sign the deal. All negotiations took place on video and finally, the signing was done with their lawyers present. 

At Skanska, we try to create products that will best suit our clients. In the case of Deka it was Generation Park Z, the best located office building in Warsaw with strong tenants, and in the case of S IMMO and the two buildings of our Campus office complex, it was the long-term lease with Microsoft and a very strong covenant of Societe Generale. In the case of SIMMO, due to the circumstances, we had to postpone the transaction for some time. Finally, at the end of the summer, we managed to come back to discussions and before the end of the year we concluded this deal as well. Both transactions were unique on the European scale. The lockdown paralyzed everyone, both privately and professionally, nevertheless we managed to secure both.

HOW IT WORKS NOW

I must admit that this new reality had its advantages. We can easily hold multi-person video calls with investors and review and negotiate transaction documents on the screen. And we do not have to waste time on travel. Suddenly everyone’s calendar was free, and they were available for negotiations almost on the next day. Another advantage was that we could use parallel virtual rooms, such as through Microsoft Teams, so both sides could easily re-group and discuss different topics internally. On the other side, there were moments when we had to use chat to discuss some issues at the same time when we were negotiating with investors online. And this has its advantages and disadvantages. The biggest challenge though was to keep all the people focused on the online discussion itself because all of us had some other everyday assignments and such “multi-tasking” did not always work well. At the end of the day, these video calls were taking more time compared to the times when we had everyone in the same room focused on one deal.

The successful Generation Park Z divestment in March 2020 was key and put us on the right path.

While these transactions were happening in CEE, the sale of 2+U was still going on. I worked with the Seattle team on preparing marketing materials and at the same time, together with the broker, Eastdil Secured, we were working on finding ways on how to show our building remotely. This process was happening concurrently with the sale of another property in Warsaw (Spark B), where we were quite advanced. This was a great occasion to share some ideas from Poland on how to perform a virtual tour of the building and what should be shown in property videos. 

VIRTUAL REALITY BECOMES “A MUST” IN THE NEW NORMAL

I believe all these digital tools greatly helped us in marketing the assets. We needed to show some creativity though. In the case of Spark, we found out that Skanska Construction is experienced with their 360’ camera. We used their skills and technique, and we prepared great material without any external help. It was amazing because the V-tour resembled the real physical tour with the only difference that on your screen you had to click on the different dots to enter the room, lobby or parking. We had a lot of fun creating it and it was great to share all these experiences with our US colleagues. However, no matter how hard we tried, at some point, the buyer still had to fly over to make the transaction happen and had to suffer all the inconveniences (quarantine on the way back). But fortunately, same as with 2+U, the purchaser managed to visit Warsaw to see Spark B before the finalization.

After these sales processes, we decided to experiment with another form of the tour. At the end of 2020, we started the sale of the fourth CEE divestment – Parkview in Prague. Again, we faced the challenge of how to present the assets to potential investors. Fortunately, in each of my previous transactions I worked with dedicated and very professional teams and here it was no different. Thus, what we did here, was that in the addition to the specially made video and instead of a virtual tour, we decided to run the tours live. With the help of our local agents, we managed to do that simply by using an iPhone and MS Teams. For the first time, we could present our assets in Prague live to the investors in another country (while I was still in Poland).

TRANSACTIONS ARE POSSIBLE EVEN DURING GLOBAL PANDEMICS

Where did all of this get us? We sold 4 buildings in 2020 in CEE, and with Parkview, which was negotiated and sold in January 2021, transactions totalling EUR 350 million were concluded in the last 12 months. Of course, this is not taking into account over $700m of the Seattle transaction which was signed in December. Quite an exceptional year in numbers I must say. I should also mention that in the meantime we managed to close the sale of Nordic Light Trio in Budapest, as well as High5ive II (buildings 4&5) in Krakow.

It was a very difficult year for all of us, but Skanska proved once again that it can be effective even amidst such crisis as a world pandemic. And yes, we had to push our own boundaries and step out of our own comfort zone – but did anyone have any other choice last year? After working at Skanska for nearly 8 years in a usual way, I, together with all the fantastic people contributing and working on transactions at Skanska, had to change our usual paths and find a new way of working. What helped were of course all my relationships with many different investors on all continents. In many cases these clients are my business friends, so I did not need to hesitate to reach out. I could easily talk not only about business but also about my private life. This remote way of communication also helped. When we were all travelling around the world it was very difficult to catch up. Many times, I was surprised when during the pandemic I asked for a video call with my colleagues on the acquisition side, proposing some time in advance as usual, and then hearing that we can speak the very next day!

                      On the roof of the biggest Skanska's property sold last year - 2+U in Seattle, US.

At Skanska we showed our effectiveness despite the global capital freeze, and we strengthened our relations with our partners. I believe this was possible due to our stable, trustworthy brand and strong business relationships that we have built over the years. We have shown that we can respond to changing conditions as a developer of healthy and futureproof offices and that our product is safe and of high quality. We showed that we were able to deliver, even when everyone was in doubt and times are uncertain. I am proud to be part of that.

I wanted to share just a few thoughts, but it ended up quite a long story! I hope you recognize some of your experiences here as well.