After a strong 2017, the Jacksonville market is well-positioned for growth in 2018.
Jacksonville ranked the third highest of all major MSAs in Florida for job growth with a rate of 2.8 percent, and its unemployment rate fell 110 basis points (bps) to 3.6 percent
Demand from expanding and new-to-market tenants, coupled with the booming local economy and rising rental rates provided confidence for developers to start construction on well-located projects near high demand clusters. As a result, office construction pursuits expanded in 2017 as two speculative projects broke ground for a combined 205,000 square feet.
Additionally, boosts in eCommerce drove job growth with industrial-related sectors adding 11,800 jobs year-over year. This was reflected in the overall vacancy as it fell to 4.0 percent, a 220 bps decline from a year prior with warehouse/distribution space falling by 280 bps to 4.7 percent during the same period.
With competitively priced rental rates, large blocks of available space and an exceptional quality of life, Jacksonville will continue to be seen as an ideal choice for companies looking for a southeast location in 2018.
1. “The Jacksonville market continues to lend itself to large occupiers of space, such as those in the insurance, healthcare, logistics and defense and military industries. With more available space and greater affordability than many other markets in the state, Jacksonville is well-positioned to win some large-scale economic development projects in 2018.
The market is starting to experience more of a trend toward urbanization, particularly in the outskirts of downtown, which will serve to attract more millennials and young entrepreneurs to the city.” — Larry Richey, Florida Market Leader
2. “2017 was a year of new beginnings and stabilization for Jacksonville. Several new suburban office projects came on line, pre-leased to some of the region’s largest occupiers. In addition to some major blocks of existing spaces moving within the market, 2017 brought new occupiers to the market, creating momentum for the year ahead.
A couple of months into 2018, we’re seeing significant activity, including the relocation of some major occupiers to new product. This leaves a bit of uncertainty as to what will happen with the large blocks of space left behind, but it creates an opportunity for landlords to continuing raising rental rates, refresh tired space and further amenitize properties to attract new occupiers.” –– David Hillegas, Senior Associate
3. “I see all economic metrics in place, such as population, employment and housing growth, for us to have another strong year in Northeast Florida. Our consolidated government and powerful leadership has additionally placed Jacksonville on the map for a more confident market of investment from industrial, retail, multifamily and even office construction. Momentum in new construction is predicted to remain stable and increase in the 2018 year.” — Julie Bohn, Director
4. “The industrial market in North Florida finished the year with strong market fundamentals and an active pipeline of new construction to meet demand in the coming year. The smaller deals contributed to a good portion of the falling vacancy rate particularly in the Southside submarkets, which accounted for nearly 40 percent of leasing activity.
The overall industrial market is still looking positive in 2018, and we expect continued economic growth and business expansion to support developers’ confidence in building new speculative product.” –– Tyler Newman, Director