Post-COVID business nods to altered reality

At the beginning of 2020, Casey Askar was speaking with several Fortune 500 companies that were interested in acquiring a vacant office tower his business owns in downtown Hartford, Connecticut.

But in mid-March, the novel coronavirus cut oxygen to the nation’s ‘lungs’: its economy. Companies previously planning to expand were no longer in the market for more office space. Instead, those businesses started shrinking their footprint.

“That (Hartford) asset is an asset we have to hold onto for awhile until the world goes back to normal,” said Askar, the president and CEO of Askar Brands, headquartered in Commerce Township, Michigan, which owns and operates dozens of quick-service and casual dining restaurants across the country.

However, the post-COVID “normal” will likely include a radically altered economic landscape for businesses. The pandemic accelerated several trends already gaining momentum in recent years, like working remotely from home, online commerce, and more widespread food delivery services, to name a few.

Hybrid ‘business-normal’

“The new normal will be somewhat of a hybrid where you work out of your home part-time and you work out of the office part-time,” said Askar, who is also the president of Legatus’ Naples Chapter.

“For the cyclical day-to-day part of your job, you’ll be able to do that out of your home,” Askar said. “When it comes to any type of research and development, and such times when you need your team to be together, that will be the time in the office.”

The economic fallout from social-distancing mandates and government-ordered shutdowns —all aimed at controlling the spread of COVID-19 until a vaccine was widely available — is still settling, but the collateral damage is already significant. Too many companies, especially locally owned “mom and pop” stores and restaurants, have gone out of business as hundreds of thousands of workers have lost their jobs.

“We’re going to see a lot of those small businesses go by the wayside unfortunately,” Askar said. “At the end of the day, the bigger you are, the more critical mass and the more resources you have, the more staying power you will have. You’ll be able to figure out how to get over the hump in this challenge.”

Said Askar, “But if you’re not, if you’re a small business owner like my folks were, with a small brick-and-mortar shop, it’s very difficult.”

Askar is no stranger to mastering a new landscape. He was just seven when his family immigrated to America from Iraq, fleeing religious persecution and seeking safety and freedom. At 18, he proudly joined the U.S. Marine Corps. Today he employs thousands nationwide through his food-service franchise brands and commercial real estate.

Small businesses slammed

Small businesses — the majority of businesses in the United States and which employ almost half of all the nation’s private sector workers — suffered the brunt of the pandemic’s economic effect. Between March and September 2020, small business revenue declined almost 20 percent, according to the Brookings Institute.

In-person dining and retail, as well as the leisure and hospitality sectors, saw daily revenues drop anywhere from 14 percent to 47 percent. Restaurants and other businesses tried to make up some of those losses by being creative, relying on third-party services like Uber Eats and DoorDash to deliver food to customers. Some were able to tread water, but still had to make difficult decisions on scaling down staff.

“In business, the money that’s lost, you can never get it back,” Askar said. “The revenue you lose, you never get back. The damage has been done. The debt that has been incurred, you’re stuck with that.”

In Askar’s case, his company had the resources to navigate the COVID economic tailwinds, and not lay off any employees.

“I made it a mission of mine not to lay anyone off,” Askar said. “Now, how long can you continue doing that? If we didn’t have the critical mass, I could never do that. If I were a mom and pop, I would already have been insolvent during the first shutdown.”

Quick-service model thrives

Askar said his company’s quick-service restaurant portfolio has done “very well” during the pandemic, especially the pizza restaurants as customers utilized their carry-out and delivery services.

“Having our own internal delivery model is different from utilizing Uber Eats or another delivery service,” Askar said. “Having someone in your uniform, following protocols on how pizza is delivered and dropped off, with a lot of safety and health standards, is why I think our carry-out delivery pizza chains were able to perform really well.

“For the initial days of the pandemic, people were paranoid about doing anything with the outside world,” Askar added. “Then they realized they still had to go to the grocery stores. They wanted to order out, and there’s nothing easier and better than pizza.”

In the always unpredictable restaurant market, Askar said dining-in had already been shrinking in recent years, but COVID-19 “ramped that up drastically.” Restaurants and quick-dining businesses with drive-thru, delivery, and carryout performed significantly better during the pandemic than conventional sit-down restaurants.

“We have a microbrewery, family restaurant, full dine-in service in Michigan that has been shut down for the entire pandemic,” Askar said. “If not for our capabilities, they would be out of business.”

The un-office debut

The lack of market demand that Askar sees for commercial office space corresponds with the remote working that companies have been relying on during the pandemic. Instead of having employees in the office, working in cubicles, technology has enabled them to work from home.

Askar said half of his employees now work from home.

“Eventually, I’m going to need less office space,” Askar said. “So for us as a landlord, seeing that is very challenging. We need to figure out how to convert our office space into another type of use, whether medical or something else.”

Large companies, even before the pandemic hit, were reconfiguring their business models and looking for smaller office space. That trend is accelerating, Askar said.

But even with remote working, companies still on occasion need to gather their employees under the same roof, whether for planning meetings, brainstorming sessions, in-person training, or professional development.

“Technology allows us to work outside the office, at home, but it can’t be entirely that way. Askar said. “We’re social animals by nature. We need some interaction. You still need to have that office component. It just may not be as much space as you once needed.

Askar, 51, a married father of six children with another baby on the way, said his family and faith sustain him through the turbulence and uncertainty of the COVID-19 era, which included a recent run for Congress. Though he came up short in his bid to represent Southwest Florida in Congress, Askar said he learned a lot on the campaign trail from spending time and speaking with people.

“I think our faith has always played a big role in our life, more than ever during the pandemic,” Askar said. “We continue to try to do as much as we can for our community and for people who are in need. We’ve been very blessed and very fortunate, and we always try to do what we can to give back.”

Said Askar, “At the end of the day, it’s just about doing the right thing. It’s doing for others what you would hope others would do for you. But again, we’re fortunate enough to be in a position to do that. Others are not.”

BRIAN FRAGA is a Legatus magazine staff writer.