by Michele Newbern Gillis
Staff Writer
About 600 members of the local commercial real estate community heard a discussion about how people are choosing to move back to downtown areas at the First Coast Real Estate Outlook conference Thursday at the University of North Florida.
Lynn Pappas of law firm Pappas Metcalf Jenks & Miller moderated a panel of four commercial real estate specialists — Petch Gibbons of Advantis, John Carey of Flagler Development Company, Paisley Boney of Ben Carter Properties and Hamilton Traylor of TriLegacy Group, who each presented their version of the real estate outlook in Florida.
“It’s really about where we live, population shifts and migrations,” said Gibbons, who noted that as people were moving out of the city and into the suburbs, the increased density was causing overcrowding and major traffic problems. “And suburbs are not turning out to be the low cost alternative we thought. Housing has skyrocketed and as people seek more room, safer neighborhoods, and a better quality of life, the areas are getting maxed out.”
So, he said, a new shift is occurring as people move back into the cities because they are tired of commuting, they want urban aesthetics, more cultural options and better infrastructure.
“They are also moving back downtown because they are tired of taking care of big houses,” he said. “These population shifts are real, meaningful and relevant to all of us.”
Citing that corporate America is a bellwether for where populations are headed, Gibbons said a low cost of living, better quality of life, proximity to resort towns near the beach, rivers, mountains, temperate climates, and proximity to colleges and universities are all top priorities for business and residential relocations.
“And people now want to be near bohemian and innovative cultures,” said Gibbons. “If you think about what I just described, it’s Jacksonville.”
Refuting the claim that Jacksonville is not a desirable city to relocate to Gibbons said, “I think we are going to see a new wave of people moving here. I think North Florida and Jacksonville are on the way to major growth.”
Carey then shifted the discussion to changes in the office space market over the last few years.
“Between 1997-2000, our company developed a million square feet of space in Florida,” he said. “Not only did we build, but significantly pre-leased or fully leased shortly after completion.”
What Carey noticed later, though, was that although there was a lot of activity, most of the space was being leased by dot com start-ups. After the implosion, when the companies moved out, commercial real estate professionals believed North Florida hit a significant real estate downturn.
He said there also has been a lot of discussion about the impact of Sept. 11 on the real estate market.
“From our perspective, we were already in a real estate downtown,” he said. “To us, Sept. 11 was an opportunity for the strong companies to bring to surface a lot of the problems that were already there.”
Carey said Sept. 11 also made companies think about decentralizing so they won’t have all of their operations all in one place.
“I think in the long term, Florida will benefit from that,” said Carey. “The other dynamic about the economy today is that in a real estate downturn, you get to see a lot of distressed property. The low interest interest rates allowed a lot of projects to be refinanced which has translated into a lot of activity in Jacksonville right now.”
Henry Fishkind of Fishkind and Associates discussed the economy and how Sept. 11 effected the overall outlook in Florida, and more specifically, Jacksonville.
“I think the economy will begin to improve,” said Fishkind. “Terrorism has made our way of life change forever, consumer confidence was hurt substantially, tourism has dropped and airline transportation is more expensive and less convenient.”
He also discussed the effects of technology.
“Computerization has resulted in inventory control and Internet productivity,” said Fishkind. “Since its inception, there has also been a shift in how people buy things.”
He said cities in Florida are becoming more mature because of several successful revitalizations in the urban core of cities like Orlando and Tampa.
“There is an increased retirement age as well,” said Fishkind. “Retirement ages will rise to 70-75. This will change the type of real estate people want and need. They are not going to want retirement homes until much later.”
He said that even in the aftermath of Sept. 11, home building is still a constant bright spot.
“Residential housing is still growing even with terrorism and the recession,” he said. Jacksonville’s competitive strengths, Fishkind added, continue to be finance, insurance and back office functions.