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| 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.
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| 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.
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| 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
