From her storefront beneath Houston’s Pennzoil Place, florist Lucia Herron surveys the passing foot traffic during a break between helping customers pick out bouquets and describes how the pandemic has altered the rhythms of life and commerce.

“The dynamic has changed totally,” said Herron, owner of Greenworks Flowers.

While her shop lives or dies by the same customers that drive any other retailer, its location is not quite as ordinary: It’s built into an underground shopping center. The shop is part of Houston’s network of underground pedestrian tunnels and shopping plazas, a prominent outpost in a subset of the North American retail landscape.

Underground shopping centers — a diverse collection of below-grade commercial spaces that can include an array of vendors such as newsstands, bakeries, restaurants, galleries and even dentists’ offices — have been a popular fixture in developments from New York to Houston to Toronto, offering business owners a captive audience of weekday commuters using expansive networks of tunnels to beat heat, cold and traffic. The pandemic has disrupted that retail real estate balance.

Analysts, designers and more than a dozen businesses in some of the most prominent underground developments in North America say their trade has been struck a double blow, first by a pandemic that temporarily brought business to a halt, then by the changed patterns of city life. The dependable vigor of workday crowds is gone. In its place, the curated dependence of underground spaces on office workers above has become a burden as the reality of long-term hybrid work settles in.

“It is at the mercy of what the return of office workers looks like,” said Grant Humes, head of the Financial District Business Improvement Area in Toronto, where more than 17 miles of tunnels connect shops in a below-ground network known as the PATH.

“The PATH is one of those places where unless you have a reason to be there, you don’t have a reason to be there — and your reason to be there is usually that you’re going to work,” he said.

In Houston, that dependency stands out in stark terms. Data from security firm Kastle Systems, which tracks office attendance using anonymous keycard data from clients’ properties, has shown office use rates there hovering around 56%, among the highest in the nation, and yet returning workers aren’t filling the underground spaces the way they once did.

Instead, Herron said she can clearly see the outcome of new hybrid work policies implemented by above-ground employers. On days when more workers happen to be in the office at once, she estimates traffic by her shop reaches about 70% of its pre-pandemic level — but other days it drops without warning to a third of what it once was — or less.

“The companies are still not operating like before,” Herron said. “I don’t think they ever will again.”

The challenges facing underground retailers are a combination of shifting demand and the constraint on spaces that are by their very nature difficult to update, said David Greensfelder, a consultant who has taught planning for the Urban Land Institute, a research and public policy group.

Invisible from the sidewalk, they can’t pivot to catch the attention of casual passers-by when commuter traffic slows.

“If you’re looking for a newspaper and you’re already above ground, you’re probably not going to go underground to buy that newspaper,” Greensfelder said.

From her shop beneath Houston’s streets, Herron put it even more bluntly: “The rhythm, for somebody like me, who has been in this same location for 30 years, has to be reinvented.”

Houston’s 6 miles of tunnels are largely linked to the surface by entrances in the lobbies of office buildings above them, and the fate of individual sections has hinged on the choices of the businesses overhead, leaving parts of the system worse off than others, according to Robert Pieroni, director of economic development for Central Houston Inc., a downtown business association. That system can also provide a welcome relief in a Gulf Coast city plagued by high temperatures and humidity.

From his station as a cook at Treebeard’s restaurant under downtown Houston, about a quarter-mile from Herron’s flower shop, Wendell Malone watched as the pandemic emptied the tunnels. Now he estimates the restaurant serves about 400 people a day, about two-thirds as many as it did before the pandemic.

In Chicago, where five miles of tunnels connect transit stations to some of the city’s most prominent buildings and provide a respite from the frigid winter weather, the picture is more dire.

The city’s main downtown business association said that through June traffic counts in the tunnels lingered near 40% of pre-pandemic levels, even as monthly averages on above-ground streets have doubled that figure, hitting 80% or more.

Canada’s two largest underground retail venues, in Toronto and Montreal, have fared better thanks to being integrated differently into the fabric of life in the cities above.

With more than 17 miles of tunnels, and 4 million square feet of retail space, including convenience stores, theaters and medical services, the Toronto PATH network holds the Guinness World Record for largest underground shopping complex.

Fellow cold-climate city, Montreal, has an underground retail system that's likewise among the largest in the world.

But unlike many U.S. developments, both systems connect not only transit and offices, but convention centers, multiple stadiums and residential buildings, creating a user base more resilient to office attendance shifts.

Still, fluctuating traffic has hit underground retail hard, according to Bradley Jones, head of retail for Toronto-based Oxford Property Group, the largest commercial landlord in Toronto.

While Oxford doesn’t track PATH traffic specifically, Jones said retailers in the food court connected to the underground network are only back to about 50% of their pre-pandemic top-line sales.

“Tuesday, Wednesday, Thursday — in some cases they're getting back to pre-COVID numbers, but when you average it over the five days, it’s less,” he said.

With a hybrid work model appearing to be the norm for some time to come, finding ways to flex with the crowds, such as dynamic scheduling and inventorying, will probably be required.

To meet the challenge, Oxford is looking to leverage the convenience factor of the tunnels, pivoting away from commuter dependency and toward lifestyle tenants such as medical and legal offices, gyms and other fitness tenants.

The overall gloomy outlook for the subterranean segment comes with at least one bright spot: The newest underground developments seem to have come back stronger from the pandemic lows.

Typically built around a central, often atrium-style, core, newer underground developments are generally designed with more external features in mind, with all aspects of the project, including the architecture and the leasing strategy, designed to draw pedestrians from outside rather than simply serving as an amenity for the offices above.

MarketPlace 28, a four-story, 200,000-square-foot retail development retrofitted below the 28 Liberty building in New York by China-based owner Fosun in 2018, has large banks of windows lighting a vertical well that drops through all four stories. The below-grade development is anchored by a theater at its lowest level, a move intended to draw users down and through the retail space, said Gensler lead retail designer Jason Carney, who worked on the project.

“It’s not dependent at all on commuters or commuter patterns,” said Carney. “It’s an entertainment destination.”

In Houston, one of the newest developments connected to city tunnels is Understory, a two-story atrium beneath the Bank of America Tower completed by Skanska in 2019, with similar design principles: ample daylight carried downward through an atrium-style core and strong sightlines from street level.

The goal was to lure more visitors than the building’s office users, said Matt Damborsky, Skanska’s executive vice president for Houston who oversaw the design of the lower-level space.

“We wanted to say, ‘Hey, the tunnel’s down here,’” said Damborsky. “We were hyper-focused on creating a space that not only people in the building could use, but also people could come in off the street and use.”

Direct comparisons are hard to come by, but Damborsky said his impression was that Understory fared better than other parts of Houston’s tunnel system during the pandemic. Seven of its nine storefronts are occupied.

For spaces that can’t be reoriented to include natural light and street-level visibility, Gensler’s Carney said he thinks the key will be creating more abstract types of “visibility” to the above-ground world, including using tech tools to draw shoppers and space enhancements such as art installations, as well as a leasing strategy that prioritizes a destination-making tenant mix over simply pushing rents.

Especially for older tunnel-and-hub developments, whether they survive may hang on whether other drivers are able to take the place of a five-day-a-week office crowd.

“Rent is a function of sales, and sales is a function of being able to capture demand,” the Urban Land Institute's Greensfelder said. “So if the demand has left, you do the math.”