Q1 Jacksonville Industrial Market Report
Jacksonville By The Numbers | Past 12 Months | Source: CoStar Group
- Vacancy Rate: 4.1%
- Rent Growth: 9.5%
- Deliveries SF: 5.1M
- Absorption SF: 4.1M
- Sales Volume: $668M
- Cap Rate: 6.8%
Submarket Overview
Jacksonville’s economy has proven resilient in recent years, maintaining a low unemployment rate of 3.3% as of February 2024. Oxford Economics attributes this resilience to factors such as robust population growth, recovery in tourism and hospitality, and strong demand for office spaces. These factors contributed to Jacksonville achieving significant job growth rates in the first half of 2023, with continued growth driven by industries like finance, professional services, and education and healthcare services by the end of 2023. The Jacksonville industrial market is experiencing a boost due to higher port activity and a significant rise in population over the last four years, leading to lower vacancy rates.
Submarket Performance
Despite strong industrial demand, it hasn’t been able to offset the impact of 4.7 million square feet of new space delivered in the past year. With another 5.0 million square feet currently under construction, it appears that vacancy rates will likely rise. However, the base case forecast predicts vacancy rates to remain relatively stable in the 3% to 4% range until mid-2024, primarily due to anticipated strong demand during this period. There’s significant interest in industrial leasing, and the fast-growing port market is driving demand for new space. The ongoing tight market conditions are fueling robust rent growth. Jacksonville reached a peak of almost 15% in Q3 2022, now at 9.5% as of Q1 2024. Jacksonville has consistently ranked among the top five U.S. markets for rent growth over the past year. Since 2017, the market has consistently outperformed the national average and is expected to continue this trend in the near future.
Investor enthusiasm for Jacksonville’s industrial sector has been strong over the past year, with 210 properties changing hands. There has been $668 million in transaction volume over the last 12 months. The average market price has surged to a record high of $98 per square foot, while market cap rates are gradually starting to rise after hitting record lows in early 2022.
80 leases were signed in Q1 2024 | 6 leases over 40K SF
- 4259 Perimeter Industrial Parkway W — 167,000 SF
- 7498 Commonwealth Ave — 108,122 SF
- 8332 Cypress Plaza Dr — 107,250 SF
- 5203 W 1st St — 90,612 SF
- 4345 Perimeter Industrial Parkway — 45,150 SF
- 8051 Bayberry Rd — 40,182 SF
