After nearly a full year into the COVID-19 Pandemic, the Jacksonville Office Market has certainly felt the effects of the fallout and an uncertain outlook. Despite only a modest uptick in vacancy over the last 3 quarters, new work-at-home policies have prevented tenants from committing to space on longer basis as future office needs remain unclear.
One of the biggest effects can be seen in the increase in sublease availability. Since the beginning of 2020 the sublease availability has increase nearly 100 bps to over 1 million square feet. The Downtown submarket faces the toughest challenges with several large blocks of direct and sublease space hitting the market with high-rises offering a less COVID-friendly office experience.
Despite the challenges that the Jacksonville Office Market faces, encouraging signs of recovery can be seen. With the strong rollout of COVID-19 vaccines, an increase in leasing velocity and activity has been seen in the 1st quarter and looks to continue through 2021.
There has also been a natural slowdown in office deliveries, with only 1 multi-tenant office building more than 100,000 SF scheduled to be delivered (VPark Place at Nocatee), which should help alleviate negative absorption. Moreover, the Florida office market, including Jacksonville, should see the benefit of companies relocating to the business-friendly environment and lower cost of living offered by the state.
Vice President, Office Leasing
