Saturday, March 7, 2015

Cushman & Wakefield Reports Jacksonville Industrial Market Mirrors North American Upswing


Larry Richey

JACKSONVILLE, FL – Cushman & Wakefield released its 2015–2017 North American Industrial Forecast. The report highlights a number of positive trends emerging in the region.
The key take-aways from the report are as follows:

The continuing economic recovery, ongoing evolution of e-commerce, and resurgence in domestic manufacturing have generated resiliency in the industrial sector.

Trends in industrial real estate supply and demand are favorable across all major markets in the U.S. The overall market has already seen a significant decline in vacancy, with vacant space at its lowest level in over a decade.

The shifting demand and service paradigms, demographic market forces, and global dynamics will support continuing growth in industrial real estate.

Research Manager Chris Owen has seen similar trends develop in the Jacksonville market. His research indicates:

The overall vacancy rate in Jacksonville’s industrial market decreased to 9.8 percent over the past twelve months, dropping three-tenths of a percentage point from the end of 2013. The vacancy rate has fallen four percentage points since the second quarter of 2010 when the market reached its lowest point.


Tyler Newman

At the end of the year, average direct net asking rental rates in Jacksonville were up $0.10, or 2.6 percent, to $3.92 per square foot. 

This was the highest year-end level for asking rates since 2010. Tenant demand for smaller sized requirements played an important part in landlords’ confidence to raise asking rates.

Jacksonville’s industrial leasing activity in 2014 was up 6.3 percent from the level recorded in 2013 and the highest amount recorded since the Great Recession. Tenant interest is both internal as well as from outside of the market.

This mirrors what Cushman & Wakefield’s local brokerage professionals are seeing on the street.

“The Jacksonville market performed very well in 2014,” said Associate Director Tyler Newman, citing declining vacancy rates. “But we anticipate 2015 to be even better. There are a number of large users in the market and a few build-to-suits either under construction or in the works.”

A rejuvenated local economy has led to constrained supply, increased demand and predictable rate hikes.

“Lease rates will most likely increase simply due to the decreased supply and the cost of new construction,” added Newman. “Tenants would be wise to lock in a long term deal now, with the lower rates, before they increase by year end.”

“On the investment side, we are seeing increased activity with everything from value-add investors – buying vacant property, investing capital for improvements, and then leasing at market rates – to large portfolios coming to market,” explained Newman, offering Flagler’s buildings at Jacksonville International Tradeport as an example of the latter.


Chris Owen

 “I’d expect this trend to continue based on the large number of investors looking to place funds into industrial real estate.”

Senior Managing Director and Florida Market Leader Larry Richey has witnessed these favorable conditions propogate across the state.

“We’re seeing tremendous growth in Florida,” reported Richey. “From Miami to Jacksonville, the economy is improving and it’s driving the industrial market to new heights.”

Cushman & Wakefield advises and represents clients on all aspects of property occupancy and investment. Founded in 1917, it has 248 offices in 58 countries, employing more than 16,000 professionals.

 It offers a complete range of services to its occupier and investor clients for all property types, including leasing, sales and acquisitions, equity, debt and structured finance, corporate finance and investment banking, appraisal, consulting, corporate services, and property, facilities, project and risk management.

 For more information, download the entire 2015-2017 North American Industrial Forecast. 

 For a complete copy of the company’s news release, please contact:

Chris Owen
Research Manager
Central and North Florida
(407) 541-4417


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