The return of office workers to downtown Fort Lauderdale from a COVID-19-induced hiatus can be measured in many ways. One of them: the business lunch.
During a recent midday mealtime at Yolo, a popular retreat for executives and office workers, most of the seats in the dining area were full and a number of patrons ate and imbibed at the bar.
“We have definitely seen an uptick,” said Tim Petrillo, founder and CEO of the restaurant’s owner, The Restaurant People. “You’re certainly seeing more suits than leisure wear.”
“We’re seeing people we haven’t seen in a long time,” he added, particularly from law offices and financial service firms that are recalling more of their people back to their downtown offices.
Pre-pandemic lunch crowds at Yolo ranged from 200 to 250 people, but during the pandemic, numbers dropped to anywhere from 30 to 70, Petrillo said. “Now we’re at a steady 150 to 200. It’s definitely getting back, not at pre-pandemic levels but certainly in the right direction.”
A run back to the office?
But there are even broader signs that the workplaces of law, finance and technology are returning to a semblance of a pre-COVID normal. This week, the city’s Downtown Development Authority asserted that the pace of workers returning to their offices from remote home enclaves is running ahead of some major metropolitan areas in the United States. Those cities include Austin, Houston Dallas, New York and San Francisco.
Over the summer, the average occupancy of Class A buildings in Fort Lauderdale was at 40% to 45%. The authority now estimates that 50% to 55% of office workers are back in their workplaces, a rate that’s nearly 20% higher than the national average.
The authority said the figures are based on estimates from property managers and recent traffic in the parking garages of downtown Class A buildings. Those buildings are defined in the commercial real estate industry as the most prestigious a city has to offer based on prime locations, first-class finishes, state of the art technologies and security and upscale amenities for tenants.
“More and more employees are choosing to get out of their 100% work-from-home routine from the past two years,” said Jenni Morejon, the DDA president and CEO. '
But it’s not necessarily the same old routine. “Downtown offices are upping their game, working to become more of a destination. This flight to quality is pushing older office buildings to upgrade their spaces to compete with the amenities offered at shared spaces and new residential buildings.”
Class A buildings are where many of the law, accounting and financial management firms are located, though many are still allowing their staffs to engage in so-called hybrid work schedule schemes, where staffers toil in the office two or three times a week and the balance of the days at home.
As local firms ease back into office life, a flood of business relocations from out of town is helping to fill empty spaces, analysts say.
“The massive influx of businesses, as well as residents, to Florida, especially South Florida, suggests a very positive outlook for all commercial real estate in our area,” said Siri Terjesen, associate dean at the College of Business at Florida Atlantic University.
“Although it may seem like there are hundreds of office buildings, the reality is that office space is limited, so firms that desire some physical presence will want to get access,” she said, especially if those offices are close to a train station, bus line, I-95 and clients.
Data source
The DDA compared its numbers with a “Back to Work Barometer” maintained by Kastle Security of Falls Church, Virginia, a national building security firm. The company is using card swipe data to estimate the share of workers who return their offices in 10 U.S. cities. Fort Lauderdale is not among the cities surveyed.
As of February 16, Kastle estimated that 36.4% of the workers in the cities it surveyed are back to the office. The figure for Austin, Texas, was 51.8%, Houston, 50.1%, Dallas, 47.4%, New York 30.8% and San Francisco, 24.7%.
Although the sampling methods for Fort Lauderdale and the cities surveyed by Kastle differ, some commercial real estate professionals and office design consultants agree that Florida is tracking ahead of other U.S. locations in workers returning to the office.
“In the state of Florida, we’re leading that charge,” said Gian Rodriguez, managing principal in Miami and Fort Lauderdale for the Cushman & Wakefield real estate services firm.
The trend is appearing across Broward County, which ended 2021 with lower vacancy rates, “increasing rental rates and consistent leasing activity,” according to a fourth quarter summary by Colliers International, the real estate services firm. Some companies are expanding, signing up for bigger spaces. For example, Sonny’s Enterprises, the maker of car wash equipment, relocated its headquarters from Tamarac to the Westpoint Business Center on Hiatus Road in Fort Lauderdale.
Investor interest in acquiring commercial office property is also on the upswing, Colliers noted, as buyers look to make deals before interest rates rise.
No slam dunk
But the prospect of office occupancies returning to pre-pandemic levels of 75% to 90% is not an automatic. Many employers, mindful of workers who now prefer remote work, are offering flexibility, which means they’re setting up hybrid work weeks with partial remote arrangements.
So returns to the office in a number of instances have been gradual.
Rodriguez said his combined staff of 200 people is back in the office. “We went from 25 to 50% to 75% and now we’re back at 100%.”
Even so, the company remains flexible. That doesn’t mean that “we’ll have every single person in every single seat every day.” Some employees will be in the offices during the middle of the week, and perhaps less so on Mondays and Fridays.
“We’ve been faster [than many employers] getting back,” he said. “But we had not started saying, ‘get your butts back to your seats.”
Hybridization and the quest for better conditions
The tempered approach appears to reflect what many employers are doing nationally, consultants say, with hybrid schemes taking a permanent place in work arrangements. Employers and landlords should be aware that workers won’t be flooding back to the office just because they felt cooped up at home. Many want improved environments.
“The nature of how work gets done will continue to change, in Florida and around the country,” Terjesen said. “Many employees’ requests for more flexible work will surely results in new ways of working, including configurations of office space.”
“Hot-desking” or “hoteling” — eliminating assigned work spaces and allowing individuals to reserve spaces for when they are in the office — has existed for decades and will see greater use.
Terjesen also see managements creating more spaces where teams can talk and collaborate on adjacent whiteboards.
“A related trend is that some workplaces will improve the ‘water cooler’ and other areas where people can meet informally,” she said. “And finally, many new workspaces will also go more modular so that people can quickly shift into the type of workspace needed. This trend is especially important if firms rent smaller spaces, but want to be able to use them for a range of functions.”
Steven Burgos, regional leader of workplace at HOK, an office design firm in Miami, said the return to office movement “has been a mixed bag and the strategy varies with the organization.”
And employers, he said, need to be aware of revamped employee mindsets.
“Some companies are changing policies and procedures,” he said. One survey he has seen shows 70% of the respondents implementing hybrid schedules.
“Workers coming back to the office are expecting flexibility in the work settings,” he said.
Many want a better user experience in the office, such as meeting rooms and offices configured in ways where they can be more focused, engaged and happy. Other parts of the equation involve provisions ranging from quiet spaces and healthy meals and snacks, to improved access to more daylight and better air quality.
“These were all things we were thinking about pre-pandemic, but the trend has accelerated,” Burgos said.
Still, the new variables in office use probably won’t deflate South Florida’s office market because of demand from inbound businesses, said Jonathan Kingsley, executive director of Colliers International in South Florida.
“Many companies and firms are realizing the hybrid model or flex time model has been a very good solution (during COVID) but it doesn’t mean that it creates less demand for space,” he said.
“We’re seeing the vast majority of tenants are renewing [leases] on some level or another,” Kingsley said. “Also there is so much growth in South Florida. Any space given back is probably being absorbed by new tenants coming into the market.”
