Dan Drotos
GAINESVILLE, FL—When the University of Florida closed due to the COVID-19 pandemic a couple of weeks ago, it sent ripples through the university town of Gainesville. Classes will be held online until the fall.
"That was obviously a shock," Dan Drotos, senior director with Colliers International in Gainesville, tells GlobeSt.com. "Our whole local economy runs on the University of Florida. Not having those students obviously has a trickle effect with retailers and service-oriented businesses.
But while there are fewer people in Gainesville and traffic is manageable, commercial real estate deals—at least for now—continue.
"Two main economic drivers drive Gainesville, education and medical," Drotos says. "Obviously, on the education side without the student housing, there is concern. On the medical side, there is huge demand and that side of the equation is ramping up to battle this virus. It's a little too early to tell from our specific deal flow. We haven't had any deals die or go away. With the nature of our deals, because there is so much lead time, there is still some confidence from the buying community and the development community that hopefully this will be behind us before some deals are realized."
However, Drotos notes that there is a little hesitation on some of the newer deals in the pipeline.
"The thinking is that we will look at it for a week or two and will reassess and try to keep the ball rolling at that time. It's a fluid situation, obviously." Before the pandemic, the Gainesville region was off to a good 2020 start, continuing where 2019 left off.
"The office sector is very strong and there is high demand for office space," Drotos says. "There is some new product coming out of the ground, which we hadn't seen in a long time. The price of second-generation office is creeping up there, but there is such a limited inventory of that type of product. If you can find a second generation office to buy as a business owner, it still makes sense to remodel and repurpose. We are seeing some new construction, which is great. That still seems to be moving forward despite the virus."
Multifamily has been relatively strong, especially around the UF campus. Drotos says the number of new units coming out of the ground has been staggering. He also notes that there is a lot of new market rate product developing west of the city, attracting both young professionals and baby boomers.
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