Diners settling in for lunch at Brazilian steakhouse Fogo de Chao at Eighth and Figueroa streets in downtown Los Angeles can splurge on a 20-ounce wagyu New York strip steak for $150. Or they can go to the Wendy's next door and grab a Baconator burger for $6.09.

The juxtaposition of the casual hamburger joint next to an imported steak restaurant is a sign of how the pandemic has changed downtown L.A.'s retail landscape. The emergence of COVID-19 has changed the leasing calculus of local landlords, who for two decades shunned fast-food restaurants in favor of high-end eateries catering to burgeoning expense account crowds.

Many restaurant spaces that went vacant early in the pandemic remain unoccupied as office workers have yet to return in pre-pandemic numbers, putting landlords under greater pressure to boost revenue with any stable tenant they can get. As a result, national chains and fast-food restaurant companies promising an ability to pay rent are doing more deals.

"After COVID they saw an opening to get back in," said Justin Weiss, a vice president of Kennedy Wilson in Los Angeles who works in retail leasing downtown. "And they did."

Los Angeles isn't the only big city turning to fast food: Manhattan has seen a flood of national and international restaurant chains open in prime retail space in recent months, including Filipino eatery Jollibee, Popeyes Louisiana Kitchen and Raising Cane’s Chicken Fingers.

In Los Angeles, the median number of months retail space sits on the market downtown reached 14.2 in the second quarter, nearly twice the 7.4 months in pre-pandemic first-quarter 2020, according to CoStar data. The number of retail leases signed downtown has been in decline since the start of the pandemic: From January 2020 through January 2022, retail leases signed in the area totaled 385, down from 449 in the prior two years, according to CoStar data.

Chris Rising, CEO of Los Angeles-based Rising Realty Partners, said it's important to get retail spaces leased, especially to attract more people and business downtown.

"The pandemic just tore the hearts out of a lot of people," Rising said. "It has been a pretty depressing past two years."

His firm owns about 2 million square feet of office space in downtown Los Angeles, and he said the chains serve a need in that area and offer options that may not have existed prior to the pandemic for residents, workers and visitors. Plus, many of these national chains favor clean, modern spaces that fit in with other retail downtown.

Still, the shift comes at a cost. While these national tenants fill spaces for landlords, some trendier and chef-driven concepts have struggled to get a foothold back in downtown since the start of the pandemic, Rising said.

In the 1980s and '90s, before more residential and creative office spaces started being built, downtown Los Angeles was home to a number of fast-food chains, Kennedy Wilson's Weiss said. But with the residential building boom that started in the early 2000s, landlords seeking to attract hip residents and office users didn't want to sign the chains.

"Previously, landlords were looking for something 'new and cool' and national concepts didn’t fit the bill," said Derrick Moore, a senior vice president of CBRE who leases downtown L.A. retail space. "Now, as the 'cool' concepts are requiring much higher tenant improvement allowances to be paid by landlords, landlords are opting to take the national deal that can be done with much lower [tenant improvement allowance] from landlords and with better credit from the tenant."

A JLL report issued in February found that retail corridors dependent on office workers and tourists are taking longer to rebound than those serving primarily nearby residents.

That dynamic has left downtown Los Angeles landlords little choice but to sign deals with national chains such as Wendy's that have been long itching to return to L.A.'s urban core, particularly near office buildings. Chains that are targeting downtown include Pizza Hut, Taco Bell Cantina and Dave's Hot Chicken, along with burger restaurants, Mexican food concepts, coffee and doughnut shops and more, real estate brokers said.

"While this is not Wendy’s first location in downtown Los Angeles, it is the first of its kind in a previously underrepresented area," a Wendy's spokesperson told CoStar News in an email. "With over 300,000 people in a two mile radius, the restaurant will serve a large number of residents."

As it did in New York, Jollibee recently opened its first Los Angeles restaurant, at 729 Seventh St. downtown. Jollibee said in a May news release that it liked its downtown Los Angeles location's proximity to L.A. Metro's 7th Street-Metro Center Station and the Bloc, a roughly 400,000-square-foot open-air mall.

"We look forward to contributing to the vibrant food scene and spreading the joy of eating to local L.A. residents, the Filipino community, and city-goers alike as tourism returns to the city in full force," Maribeth Dela Cruz, president of Jolibee North America, said in the statement.

Representatives of Pizza Hut and Dave's Hot Chicken did not respond to a request to comment from CoStar News. A representative with Taco Bell Cantina said it didn't have any information to share at this time.

The influx of national chains to downtown Los Angeles may be reflective of the growth of full-time residents in the urban center, said Nick Griffin, executive director of the Downtown Center Business Improvement District.

Downtown L.A. now counts 80,000 residents after a surge in apartment construction. In the past decade, roughly 16,000 net new units were added downtown, nearly doubling the number of apartments, according to CoStar data.

Plus, Weiss said, any successful urban center needs a variety of retail options to serve a wide range of consumers. While there's room for more national chains to expand, there will also be non-national chains vying for space, too, he added.

"A blend of those national chains along with the hip and cool startup-type restaurants is not as bad a thing that people, including myself, would have thought in 2018," Rising said.