Q1 2023 Industrial Real Estate Report: Jacksonville, FL
Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.
Jacksonville, known for its stunning coastline, diverse neighborhoods, and rich history, offers a wide range of attractions and opportunities to both residents and visitors.
The city boasts a thriving and diverse economy, with significant contributions from sectors such as finance, healthcare, logistics, manufacturing, and technology. At the close of Q1 2023, the unemployment rate was impressively low at 2.6%.
In Q1 2023, Jacksonville's industrial real estate market saw increased vacancies, positive net absorption, and increases in average asking rents.
General Area Overview & Demographics
Jacksonville, Florida, is a vibrant city located in the northeastern part of the state. It holds the distinction of being the largest city in Florida in terms of both land area and population, making it a crucial economic and cultural hub. With a population of approximately 920,000 people as of 2021, Jacksonville is a diverse and multicultural city, boasting more affordable industrial rents than neighboring cities.
The demographics of Jacksonville reflect a mix of different ethnicities and backgrounds. The city has a significant African American population, accounting for around 30% of the total population, alongside a sizable White, Hispanic, and Asian population.
Another defining characteristic of Jacksonville is its strong military presence, with Naval Air Station Jacksonville and Naval Station Mayport calling the city home. This military presence has a profound impact on the local economy and culture.
Spanning an extensive area of 840 square miles, Jacksonville holds the distinction of being the largest city in the contiguous United States in terms of land area. It encompasses both urban and suburban areas, with a variety of neighborhoods catering to different lifestyles. From historic districts like Riverside and Avondale to upscale communities like Ponte Vedra Beach and San Marco, Jacksonville offers a diverse range of living options.
The city's deep-water port, one of the busiest in the nation, contributes to its status as a major transportation and trade center. Additionally, Jacksonville hosts a number of Fortune 500 companies and serves as a regional headquarters for many major corporations.
One of the highlights of Jacksonville is its abundant outdoor recreational opportunities. Thanks to its proximity to the Atlantic Ocean, residents and visitors can enjoy activities such as boating, fishing, and surfing. The city also boasts numerous parks, nature preserves, and golf courses, providing ample opportunities for outdoor enthusiasts and contributing significantly to its prosperous nature.
Summary of Jacksonville Industrial Space Performance in Q1 2023
Overall vacancies for Jacksonville industrial real estate increased from 2% to 2.4% in Q1 2023. The Northside neighborhood had the highest vacancy rate at 5.8%, followed by the Westside at 4.3%. On the other hand, the Beaches submarket had the lowest vacancy rate at 0.1%, with Clay County close behind at 1%.
Analyzing vacancy rates by building type, R&D/flex space experienced the highest vacancy rate at 8.5%. Manufacturing had a vacancy rate of 1.1%, while warehouse/distribution stood at 5%.
Looking at net absorption, a total of 750,000 square feet was absorbed in Jacksonville's industrial real estate market in Q1 2023. St. Johns and Clay County were the only submarkets with negative absorption, at -37,000 and -6,000 square feet, respectively.
Notably, Westside and Northside accounted for the majority of positive absorption, totaling 735,000 square feet.
What Are Industrial Real Estate Rents Like in Jacksonville, FL?
Rents for Jacksonville industrial real estate increased from $6.71 to $6.98 per square foot quarter-over-quarter. The Beaches submarket had the highest average rents at $16.01 per square foot, while Downtown recorded the lowest rents at $4.66 per square foot.
Across building types, R&D/flex space commanded average rents of $11.19, warehouse/distribution averaged $6.19, and manufacturing averaged $5.44.
Purchase & Leasing Activity
The average price per square foot for Jacksonville industrial real estate in Q1 2023 was $87, slightly lower than averages seen in 2022. Total sales volume reached $80 million in Q1 2023.
Leasing activity also increased from 1.8 million square feet to 2.2 million square feet quarter-over-quarter.
Notable Industrial Space Deals in Jacksonville in Q1 2023
Several notable deals took place in Q1 2023 for Jacksonville industrial real estate:
- Toyota purchased 416,000 square feet for $38.2 million.
- East Capital Partners' purchased 321,000 square feet for $30 million.
- Primark leased 547,200 square feet.
- Samsonite leased 240,000 square feet.
These are just a few examples among other notable activity.
New Industrial Real Estate Development Activity in Jacksonville in Q1 2023
Jacksonville's industrial real estate market saw 2.3 million square feet of new deliveries in Q1 2023. Some of the top projects under development included:
- Imeson Park South - Building E for 1 million square feet;
- Imeson Park South - Building C for 547,000 square feet; and
- Florida Gateway Logistics - Building 8 for 1 million square feet.
At the close of Q1, there were 6.2 million square feet of new industrial real estate under development.
Market Forecast for Jacksonville's Industrial Real Estate Market
Looking ahead, the market forecast for Jacksonville's industrial real estate market is positive. The strong demand for high-quality spaces, combined with the city's affordability and infrastructural improvements at JAXPORT, positions Jacksonville as an appealing logistics and transportation hub.
The construction surge and diverse industry appeal contribute to the positive growth of Jacksonville's industrial real estate market, making it a strong performer for 2023.
Takeaways for Industrial Real Estate Investors
In conclusion, Jacksonville's industrial real estate market has experienced positive growth, driven by construction, affordability, infrastructural enhancements, and a diverse range of industries.
Do your research, stay diligent, and happy investing.
Methodology
This report was written with property information from the MyEListing.com platform in corroboration with other freely available commercial real estate research data.
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