Jacksonville, FL Industrial Market Report
Market Overview
Jacksonville is the most populous city in Florida and a popular destination for tourists and locals alike. The industrial market has experienced strong demand in recent quarters, with a robust level of industrial leasing interest. Development activity is on the rise in North Jacksonville, heavily attributed to the success of JAXPORT. The market is home to Florida’s largest container and second-largest vehicle ports. This eastern seaport has direct access to 98 million people within one day, features two primary interstates, I95 and I10, as well as direct rail service, making it a popular destination for investors searching for industrial properties to invest in.
Highlights
- Jacksonville’s unemployment rate has increased from 2.3% in April of this year to 3.3%, slightly below the nation’s average of 3.8%.
- The vacancy rate is averaging 4.0% for all industrial types. This is expected to rise to the mid-4.0% range and will likely stay between 4.0%-5.0% in the upcoming quarters.
- There is no shortage of occupiers; over the last 12 months, about 30 lease deals that were 100,000 square feet or more were signed in Jacksonville, and in this quarter alone, two 1M square foot facilities were leased.
- By the end of Q4 2023, more than 1.5M square feet of industrial space is expected to be delivered to the market.
Rents | Vacancy | Construction
The competitive market conditions are leading to significant increases in rental prices, with an annual growth rate of 12.6% year-over-year, surpassing the national index rate by a considerable margin.
Strong renter demand has caused a notable rise in rents in recent quarters but is set to slow down due to the additional supply being added to the market. At the moment, average asking industrial rents are $10.10 per square foot, below the national average of $11.70. Flex space is peaking at $15.16 per square foot. The pace of rent growth is set to settle around 12% by the end of Q4 2023, which is outstanding.
The industrial vacancy rate has seen an uptick in the last 12 months and stands at 4.0%. With an additional 4.7 million square feet of industrial space currently under construction, the vacancy rate is set to rise in the upcoming quarters. Of that 4.7 million square feet, more than 1.5 million square feet of industrial space is set to be delivered by the end of Q4 2023, and pre-leased stands at 44%.
Sales
The typical market price has reached an all-time high of $102 per square foot, while market cap rates are gradually starting to rise again after hitting historic lows in early 2022.
Over the last year, there has been robust investor interest throughout Jacksonville’s industrial sector, with 180 properties trading hands, and the 12-month sales volume is $700 million. Total sales volume year-to-date was about $415 million as of August 2023.
