Through the first half of 2021 the Jacksonville Office Market continues to follow previous projections with overall vacancy rate trending upward, albeit at a slower pace seen in the last 2 quarters. Year-over-year the vacant available rates has increased from approximately 16.7% to 19.5% with about 1 million square feet of sublease space available.
Direct rental rates have remained mostly unchanged since the 1st quarter of 2020 with full-service rates hovering around $21.25/SF across all building classifications. However, Tenants can expect to receive increased lease concessions in the form of free rent, Tenant Improvements, and more flexible lease terms.
As work-at-home policies becoming more commonplace, many companies are still working on finalizing long-term space needs and are opting for shorter-term renewals. While leasing activity has remained well below pre-pandemic levels, Jacksonville has seen several larger office users announcing a gradual return of office employees by the end of the year. With more office users begin to optimize office needs vacancy rates to increase at much slower pace as it continues to level off.
Tenants should be able to capitalize on more aggressive lease terms offered by Landlords until occupancy rates begin to improve.
“Despite the uncertainties which remain in the future of the office leasing market, we continue to see strong buyer demand for office investment acquisitions in Jacksonville. Investors are recognizing the many competitive advantages (i.e. cost of living, quality of life, etc.) of our market compared to other metros, which will continue to attract new business and tenants to our area.”
Senior Vice President, Investment Sales
