Numerous national retailers continue to search for space in Jacksonville, showing sustained demand in our market.
Strong demand from retail tenants chasing the heightened consumer spending in Jacksonville has allowed fundamentals to tighten in the market. Vacancies continue to compress to new lows, following strong absorption numbers in recent quarters. Thus, landlords have had the opportunity to push rents to record highs. However, rents remain a bargain compared to peer Florida metros. Supply waves in the past few years have not been cause for concern, as most new deliveries have come in the way of build-to-suits.
Jacksonville has seen strong growth in the office market for most of the cycle thanks to a low cost of living, increased wages, cheaper office rents, and available land. Office-using employment has seen an annual increase around 3% since 2010, helping drive lower vacancies in Jacksonville as major companies expand in the area. However, more recently, office-using employment has stagnated in the metro, lead by a slowdown in the financial industry and professional/business services. This has resulted in sluggish demand from office tenants, driving up vacancies in the market.
Jacksonville has a distinct advantage in the industrial market compared to its peers to the south and farther from more inland markets. The metro is positioned along the coast and provides ease of access to vital interstates in all directions, including I-95 and I-10. Jacksonville is also the fourth-largest industrial market in Florida, with over 137 million SF of industrial space.