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By Gary Tasman If nothing else, 2020 taught us that we can all adapt to changing conditions and learn how to navigate through radical shifts in how we function day to day. This is true not only for individuals and families but also for businesses. Millions of business owners and managers were forced to radically reinvent their business models to remain solvent during the COVID-19 crisis. This is especially true of the restaurant industry, which is accelerating trends at warp speed. Stay-at-home regulations, social distancing, and public apprehension have forced restaurants to shift their models significantly to focus on delivery and carry-out in order to stay profitable. Fortunately for many establishments, this “quick service restaurant” trend had already emerged pre-pandemic. Restaurants that had already embraced this shift were better positioned to weather the storm produced by COVID-19.  For decades, the food delivery space was dominated by pizza, but in recent years delivery apps rapidly grew in popularity, making it possible to have meals delivered from a variety of restaurants. Locally-based Grub Cab, now part of Bite Squad, began delivering from restaurants in Fort Myers more than a decade ago, and has since been joined by national competitors like Grubhub, DoorDash, and Uber Eats. Cushman and Wakefield corporate research indicates that digital ordering and delivery have been growing 300 percent faster than dine-in traffic since 2014—and that trend is unlikely to slow in our “new normal.” This paradigm shift shouldn’t be surprising, as we’ve seen a similar trend developing in retail for years. Omnichannel ordering and engagement—activities such as ordering online for in-store pickup—has redefined big box retail and even automobile sales models. It only stands to reason that this template would eventually carry over to the dining industry. “Today’s world is all about convenience,” explained Matt Ashman, Cushman & Wakefield’s head of London leisure and restaurants. “Increasingly more customers, especially Millennials who represent a growing proportion of the consumer population, want to consume their favorite foods whenever and wherever they want.” A shift to omnichannel dining doesn’t occur overnight, and restaurants that weren’t prepared to shift their business model likely learned some tough lessons during the early months of the pandemic. In many cases, restaurants have needed to remodel to be able to simultaneously offer delivery, pickup, and dine-in options. Delivery drivers need designated spaces, carry-out customers need a dedicated pickup area, and in-person diners wish to dine uninterrupted by the change in workflow. In some cases, specialized equipment, technology, physical remodeling and plumbing or electrical infrastructure updates are needed to ensure customer satisfaction no matter how they order and consume their meals. The shift to our “new normal” has clearly left its mark on the dining industry. A survey released by the National Restaurant Association in December indicated that 110,000 restaurants had closed permanently or long-term as a result of the COVID-19 pandemic, representing roughly one in six dining establishments in the United States. Of the full-service restaurants that had remained open, revenue had fallen 36% on average. Like every other industry, the dining industry is headed for a reset as we journey towards recovery from the COVID-19 recession. Regardless of the pandemic, omni-channel dining is here to stay. Those restaurants that were able to shift their business models quickly will likely reap the benefits of pent-up demand once the pandemic has finally passed. Restaurants that don’t outlast the pandemic will ultimately lead to more restaurant space available for a new generation of omni-channel dining establishments.  Are you prepared to evolve your business and take advantage of the paradigm shift presented by COVID-19? The Go-To Team of commercial property brokers at Cushman & Wakefield | Commercial Property Southwest Florida is an excellent resource as you consider your options. Cushman & Wakefield’s Southwest Florida property brokers have extensive local market knowledge and best-in-class data and analytics to guide your decision-making. Contact us for a complimentary, no-obligation consultation by calling 239-489-3600 or contact-us.

By Gary Tasman Season has arrived in Southwest Florida, but like so many other traditions, it doesn’t look quite the same as it did one year ago. While our roads are busier than they were a few months back, our annual winter influx of visitors and residents hasn’t quite reached the levels we saw in 2019 or even early 2020. Tourism, hospitality and lodging have long been the primary drivers of our region’s economy. The last year has definitely been the most challenging for these intertwined industries. Lodging, in particular, has struggled across the world. And while Southwest Florida has seen its share of difficulties in the hotel industry, our region is actually one of the brighter spots in the nation. When the COVID-19 pandemic essentially shut down the U.S. economy in March, travel plans were first on the chopping block. An April 2020 survey by ValuePenguin and LendingTree showed that nearly half of all Americans canceled our summer travel plans because of coronavirus concerns. The impact on the lodging industry was immediate. Cushman & Wakefield data reveals that nationally, hotel occupancy was at a mere 33.5% in the second quarter of 2020, compared to 70% occupancy over the same period in 2019. Road trips were the preferred travel option for most Americans, who likely sought socially- distanced vacations at destinations close to home. Hotels located near highways and recreational destinations had stronger performances than urban lodging and conference destinations. Southwest Florida benefited from the road trip trend in 2020. Situated within a few hours of three of the nation’s largest metro areas, and with an abundance of socially-distanced outdoor activities available, visitors from across the state turned to our area in search of open beaches and a change of scenery. According to the Tourist Development Council, in-state visitors to Collier County in October 2020 increased 60% over October 2019. Lee County has seen a similar trend. A recent News-Press article, citing data from Arrivalist, noted that 70% of Lee County’s visitors since the pandemic began have come from other parts of Florida. Nationally, hotel construction and sales have slowed, and while many lodging establishments are still being built, most have pushed back their opening dates until travel is more active. This was not the case for Fort Myers’ long-awaited Luminary Hotel & Co., which opened in September. Our area shows little intent to slow down, with five more new Lee County hotels in the works for 2021, averaging more than 110 rooms each. Local developers appear to be banking on a rapid recovery of the tourism market. The exception is in Port Charlotte, where Allegiant Airlines halted construction of its massive waterfront resort, suspending construction in mid-2020 and ending a loan agreement to develop the destination. The resort was expected to lure travelers from the 40+ cities with nonstop flight access to Punta Gorda, but Allegiant recently stated that it has no plans to put more capital into the project until late 2021. A full recovery for our tourism and lodging industry will be slow, even while the COVID-19 vaccines are providing hope to lodging owners and travelers alike. Nationally, the lodging industry isn’t expected to see a full recovery until late 2023 at the earliest, but here in Southwest Florida, we’re already seeing signs of hope. Alaska Airlines, Allegiant Airlines, United Airlines, JetBlue Airways and Southwest Airlines have all either added routes to our region’s airports or have announced plans to do so in the very near future. While many northern states are still partially shut down because of the pandemic, Florida’s open economy may serve as a potential beacon for vacationers from these destinations, sparking a faster-than average recovery in the tourism and lodging industries. Property owners with land or buildings suited for lodging or hospitality should not lose hope in the face of the pandemic, nor should commercial property owners in any other asset class. Tourism in Southwest Florida is expected to recover much more quickly than the nation as a whole, thanks to in-state travelers who are sustaining Southwest Florida’s tourist economy. We sometimes bemoan Southwest Florida’s dependence on tourism for the health of our economy, and certainly we felt the sting in mid-2020. However, a quick projected rebound in lodging and hospitality will generate tourism dollars in our region and create demand for commercial property in all asset classes. To take advantage of this projected trend, contact the professionals at Cushman & Wakefield Commercial Property Southwest Florida. With extensive local market knowledge and best-in class data and analytics, Cushman & Wakefield is your go-to team for commercial property decision-making. Contact us by calling 239-829-5400 or contact-us.

By Shawn Stoneburner When the economy takes a tumble, investors immediately start hunting for recession-resistant assets. For the better part of the last 30 years, commercial real estate investors have turned to medical properties, which has been one of the strongest investment performers in our economy, regardless of economic conditions. Even during the global financial crisis of 2007-2008, growth in the medical office market continued while other sectors stumbled. A drive around Southwest Florida provides plenty of evidence of the resiliency of the medical real estate market. In the last five years, our region has seen close to a dozen urgent care centers open, including several multi-location chains. Lee Health invested in a mammoth expansion of Gulf Coast Medical Center, Family Health Centers of Southwest Florida added a three-story, 65,000 square foot medical center in Lehigh Acres, and Healthcare Network of SWFL opened its own three-story facility in Golden Gate.  Ready to make a move?  Get started by contacting us. The real question is if the medical real estate market is immune to COVID-19. As we all know, the COVID-19 recession has been unlike any other economic downturn we’ve experienced in our lifetimes. Nationwide, pandemic-related shutdowns forced doctors’ offices to close and elective procedures to halt. For those who needed to see a doctor, many delayed appointments or switched to telehealth services rather than risking exposure to the novel coronavirus. As a result, spending in the healthcare sector declined sharply in the second quarter of 2020, and medical office occupancy plunged. Commercial property investors have been left wondering if the medical real estate sector was as bulletproof as we’d been led to believe. While worry is certainly understandable in uncertain times like these, the pandemic’s impact on the medical office market should be a short-term concern. Over the long run, Cushman & Wakefield’s commercial brokerage professionals believe that the medical office market is poised to make a strong comeback. There are two primary reasons why. The first is our aging population, and the second is the economic condition of the healthcare sector as a whole. When the baby boomer generation first appeared, our nation’s population looked very different. In 1950, there were only about 12.4 million senior citizens in our country. Today, the U.S Census Bureau estimates that there are nearly 51 million Americans age 65 or older—a number that’s expected to increase to 80 million by 2040. And as we collectively age, our medical needs increase. While the 65-and-older crowd makes up just 15.6% of the U.S. population, this age group accounts for 36% of healthcare spending. With our nation aging, our need for medical care will only increase further, and medical office properties will be in high demand. Here in Southwest Florida, that demand will be even more relevant. Seniors currently make up an estimated 32% of the total population in Charlotte, Collier, and Lee Counties, keeping the need for health care on the rise. Health care also continues to be a strong sector financially. For the last decade, health care spending has increased $136 billion per year. Our aging population, combined with the rising cost of health care services, has kept spending on an upward trajectory. In fact, the Center for Medicare and Medicaid Services projects that health care spending will nearly double over the next decade—to an average growth of $268 billion per year. Even when COVID-19 brought the economy to a near standstill, the health care sector was one of the quickest to rebound. The pandemic caused a 9.6% decline in healthcare employment—a staggering number, but small compared to the 14.5% decline in U.S. jobs overall. More important, as of October, nearly two-thirds of those health care jobs had been recovered, compared to 54% of all jobs in the country. Health care spending followed a similar pattern. In the second quarter, health care spending dropped 54%. By the third quarter of 2020, 94% of that spending had bounced back. For decades, the medical sector in commercial real estate has been considered nearly recession-proof. While the COVID-19 pandemic has certainly challenged that belief, the experts at Cushman & Wakefield believe that our population trends, combined with the economic growth of the health care sector, will keep medical properties in high demand well into the future. We’re already seeing local indications of this trend. Six months into the pandemic, Encompass Health announced it was planning a 40-bed rehabilitation hospital in Cape Coral—one of six new medical offices planned for the Cape in the midst of a pandemic. Along the I-75 corridor, Frantz EyeCare is finalizing plans for a 60,000 square foot corporate headquarters, surgery center and medical office building that will break ground next month.  The remainder of Southwest Florida is likely soon to follow. While nobody will soon forget the human tragedy of COVID-19, the pandemic’s influence on the medical office real estate market will likely be a short-term stumble rather than a long-term calamity. To learn more about commercial real estate and development opportunities in the medical office market, contact the professionals at Cushman & Wakefield Commercial Property Southwest Florida. With extensive local market knowledge and best-in class data and analytics, Cushman & Wakefield is your go-to team for commercial property decision-making. Contact us for a complimentary, no-obligation property valuation by calling 239-829-5400 or contact-us.