With the pandemic forcing people to stay at home in Florida, remote work has become a reality for many. Huge office buildings in major metropolitan centers are closed or operating at considerably low capacity. Demand for offices has declined and, at the same time, developers have also slowed activities. The truth is that the commercial and office market in Florida suffered a lot with the pandemic, however, as the new needs become clearer and the “new normal” begins to show its characteristics, it becomes easier to implement adaptations.
The more the market changes new buildings and spaces are required, positively impacting the commercial and office market. It is evident that this market has not been negatively affected, but a new proposal has emerged, requiring adaptations, like any other sector. Transitions of this magnitude bring interesting investment opportunities. There is, therefore, an evolution of this segment.
Nor does it mean that remote work came to replace corporate spaces. Recent research shows that people do not wish to spend 100% of their time at home. The tendency is that, when they return to normal, they choose to spend part of their time at home and part at work.
In addition, with the success of remote work, many companies are considering creating satellite offices to support their employees. They are, therefore, new constructions, which positively impacts the commercial real estate market.
Even companies that decided to downsize their space are now looking for smaller environments. Those that remained at the current addresses will need remodeling and adjustments to the new normal. Before the pandemic, the word was “sharing”, with wide-open corporate spaces, without partitions and encouraging collaboration. With the advent of the pandemic, these environments became an invitation to contagion. The new spaces will need adaptations and, in many cases, larger areas to make social distancing feasible. The new corporate dynamic calls for a new architecture that provides safe and healthy environments. Some examples of modifications are touchless buttons for opening doors and elevators, scanners to measure employee temperature, modern air conditioning systems that prevent air recirculation, among other adaptations.
At the same time, companies are not only changing addresses within their current neighborhoods or cities. Many are considering changing their state. Florida has received several major brands. The last movement in this direction was the Wall Street giant Goldman Sachs, which announced last week its intention to create an arm of its Florida operations. New companies arriving in the Florida Real Estate market will also help to warm up the local market.
Even Miami Beach, which is known for being a tourism-oriented city, is searching for developers for new commercial buildings. Aventura city, which until then was seen as a predominantly residential neighborhood, is acquiring characteristics of Miami’s central urban neighborhood, similar to Brickell.
The migration of companies from other states with a high tax burden to Florida was already considered, but many companies did not know the correct moment. With the success of remote work, the change was hasty. And Florida can only benefit from this, as it does not charge a State Income Tax and offers a better quality of life than many other states, such as those in the north, with a severe winter.
All these needs and new requirements may, at first, negatively affect the commercial and office real estate market, however, they become opportunities for developers and investors. It is true, though, that while there is a transition phase and the new normal is not 100% clear, the market will experience instability. The first to offer new solutions in a fast, accessible and creative way will come out ahead. Old buildings will need to be remodeled. The fact is that the commercial and office market can enter an interesting dynamic, with real investment opportunities.