Orlando office deals and build-outs are waking up from Covid-19 slumber

Justin Luna needed to make a decision in mid-2020 about his Orlando bankruptcy law firm's future office space as its lease was expiring at 111 N. Magnolia Ave.

The decision was complicated. For one thing, no one was working at Latham Luna's office as the pandemic forced attorneys, staff and paperwork to go digital. Meanwhile, clients weren't coming into the office, either, and many meetings were being held online. Suddenly, one of the firm's biggest expenses, leasing space, was becoming its biggest headache.

So, Luna shopped around and decided his firm would stick with an office — but with a 30% reduction in space. His new lease at 201 S. Orange Ave. also included an option to give back the space after five years, something that wasn't included in Latham Luna's previous lease.

A building permit was issued for Latham Luna's new office buildout on Feb. 17 with an estimated cost of $200,000, according to city of Orlando records. Winter Springs-based RB Marks Construction Inc. is the general contractor.

"There's less focus on attorneys needing giant offices," Luna said. "The important part is having good conference and breakout rooms and common areas for staff."

More office construction

Indeed, City Beautiful companies now are making long-term decisions about their office spaces that had been delayed due to the pandemic. Some firms have decided to go fully remote while others are making space changes as the pandemic has upended the office real estate market.

Indeed, office real estate professionals say roughly 52% of their deals were on schedule in the fourth quarter compared to 38% in the third quarter, according to a Society of Industrial and Office Realtors survey. Still nearly nine in 10 office real estate professionals said their leasing activity was lower than pre-pandemic levels despite overall leasing activity improving.

On the construction side, contractors are seeing an uptick in office build-out work. Jorge Ugarte, division leader in the Orlando office of Miami-based Origin Construction, said he's seeing an increase in clients redesigning spaces in addition to subletting or downsizing their offices. "The projects that were shelved are coming back to life."

Workers return

Meanwhile, more people are returning to the office. For example, Dallas-based contractor Austin Commercial was moving into its new space at 333 S. Garland Ave. when the pandemic hit, which paused workers from going to the office, Business Development Manager Rob Allen said. However, in recent weeks, most people have returned to Austin's new space while following safety guidelines.

"We're seeing people come back to offices and the construction pick up," Allen said.

For Latham Luna, roughly 70% of people are coming to work versus the 95%-plus before the pandemic. Luna himself was working from home on a recent weekday afternoon when a reporter called. He said he hasn't noticed morale slipping with more people working from home.

"We still have days when we want everyone to come in," Luna said. "But we found that most people are happier with the flexibility."

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