Research &
Forecast Report
NORTHEAST FLORIDA
Q1 2016 | Industrial
Regional Summary
The Jacksonville Industrial market ended Q1
with a vacancy rate of 6.1%. The quarter ended
with 1,415,167± SF of positive net absorption,
adding to the healthy rebound of the industrial
leasing activity. We expect the leasing activity
will continue to be strong in 2016. With 747,752
SF of deliveries thus far in 2016, Jacksonville’s
industrial market could see more product on the
market this year.
The Jacksonville region ended Q1 with the an
unemployment rate of 5.1%. The regions overall
growth and economic stability coupled with
the logistical benefits of our central location
and low tax structure has made Jacksonville a
competitive location for various companies. As
area improvement projects are completed and
more jobs are introduced into the market, the
demand for expansion space and/or available
land is imminent.
Net Absorption
Rental Rate
>> Warehouse properties experienced a
positive net absorption of 1,457,059±
SF in Q1, while flex reported a
negative net absorption of 41,892± SF.
>> Rental rates within the Flex sector
increased to $9.46/SF/YR, up from
$9.34/SF/YR.
Vacancy
>> Vacancy for warehouse properties
decreased 100 basis points to 5.8%.
>> Vacancy for flex properties went up
slightly to 10.3%.
>> Total vacancy of all industrial product
is at 6.1%.
>> Warehouse product rates increased to
$3.90/SF/YR, up from $3.88/SF/YR.
Construction/Development
>> Two buildings totaling 747,752± SF
were delivered at the end of Q1.
>> 98,877± SF of industrial space is
currently under construction in the
Jacksonville market.
Absorption & Vacancy Rates
3,500,000
13.0%
3,000,000
12.0%
2,500,000
2,000,000
Market Indicators
VACANCY
VACANCY SUBLEASE
NET ABSORPTION
RENTAL RATE
CONSTRUCTION
*Q2 2016 Projections
Source: CoStar Property
11.0%
1,500,000
Q1 2016
Q2 2016*
10.0%
1,000,000
500,000
9.0%
0
-500,000
8.0%
-1,000,000
7.0%
-1,500,000
-2,000,000
6.0%
-2,500,000
-3,000,000
5.0%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015 2015 2015 2016
1q
2q
3q
4q
1q
Absorption
Vac %
In The News
>> JAXPORT Pushes for Growth
The Jacksonville Port Authority continues to push growth by
expanding investments and service outlets. The port invested
in larger cranes that are approximately 30 feet taller than the
previous cranes on site. This investment can now reach 70%
more containers at 22 containers than the previous 16 count. The
port continues to push harbor deepening by 7 feet so it can serve
a larger scale of cargo ships. With the first phase of dredging
in the works, the port hopes to begin construction Q1 2017.
By increasing the depth 7 more feet, the deepening generates
opportunity to access future business, further job creation, and
international trade opportunities.
>> March ISM Manufacturing Index
For the first time in six months, the ISM manufacturing index
rose to 51.8 in March, above the consensus expected level to
51.0. (Levels higher than 50 signal expansion; levels below 50
signal contraction.) The prices paid index surged to 51.5 in March
from 38.5. New orders and production, two forward looking
measures, enabled this growth and gives the public reason to
believe a continuous economic pickup and activity driven future
is underway. Thirteen of eighteen industries reported growth
on new business and orders. As companies begin to hire to
fill new demand, the manufacturing employment should move
higher as well. As a whole, today’s data shows manufacturing
activity moving in the right direction. Construction declined
0.5% in February, but rose 0.3% including upward revisions
to prior months. The decline in February was due to a drop
in commercial construction (particularly manufacturing and
communications facilities) as well as government projects
(bridges and public college classrooms), which offset an
increase in home building. The national Case-Shiller index, which
measures home prices, rose 0.5% in January and is up 5.4%
from a year ago. That’s an acceleration from the 4.3% gain in the
year ending in January 2015. (Source: National Association of Purchasing
JAXPORT Invests and Grows
Source: Jacksonville Port Authority
ISM Mfg: PMI Composite Index
Source: Institute for Supply Management/Haver Analytics
Management)
>> CSX and Transportation Index Stock Climbs
Since the transportation index’s Jan. 20 low, it’s climbed 22
percent in the last quarter. The Dow Jones Industrial Index
has climbed 12 percent over the same period. The spike is
largely attributed to investors buying up shares in transportation
companies, after the industry had a rocky start due to slowing
global growth and struggling commodities markets. From Jan. 20
to March 18, CSX stock has climbed 21.2 percent, while trucking
firm Landstar System Inc. (Nasdaq: LSTR) grew 22.3 percent.
The rise in investor confidence reflects that of the transportation
companies, who are predicting stability in their industries come
summer. (Source: Jacksonville Business Journal)
2
Transportation Shares Spike Investors
Source: CXS: How Tomorrow Works
Northeast Florida Research & Forecast Report | Q1 2016 | Industrial | Colliers International
EXISTING PROPERTIES
VACANCY
BUILDINGS
TOTAL
INVENTORY SF
DIRECT
VACANT SF
Arlington/Beaches
22
217,910
32,500
Butler Corridor
SUBMARKET
TOTAL
VACANT SF
CONSTRUCTION
RATES
VACANCY %
YTD NET
ABSORPTION
YTD
DELIVERIES
SF UNDER
CONSTRUCTION
QUOTED
RATES
32,350
10%
1,350
0
0
14.17
FLEX
107
4,404,440
560,213
560,213
12.7%
(46,528)
0
0
$9.36
Downtown
8
80,083
0
0
0.0%
0
0
0
$0.00
Mandarin
9
78,532
0
0
0.0%
0
0
0
$0.00
Nassau County
5
35,453
0
0
0.0%
0
0
0
$0.00
Northside/Oceanway
9
259,424
16,000
16,000
6.2%
8,500
0
0
$4.75
Orange Park/Clay County
15
369,159
44,949
44,949
12.2%
0
0
0
$11.97
Riverside
42
587,075
10,324
10,324
1.8%
0
0
0
$6.50
San Marco
26
499,235
44,380
44,380
8.9%
1,114
0
0
$10.23
Southside
20
279,201
45,352
45,352
16.2%
4,672
0
0
$8.60
St Johns
32
493,980
18,876
18,876
3.8%
(2,500)
0
0
$8.99
Westside
12
279,134
10,587
10,587
3.8%
0
0
0
$10.00
Totals
306
7,574,856
783,031
783,031
10.3%
(41,892)
0
0
$9.46
WAREHOUSE
Arlington/Beaches
221
1,950,549
90,650
90,650
4.6%
2,600
0
0
$7.22
Baker County
17
1,298,086
113,546
113,546
8.7%
0
0
0
$3.39
Butler Corridor
515
16,340,573
979,250
984,370
6.0%
277,824
0
0
$5.04
Downtown
449
11,389,190
417,753
417,753
3.7%
(10,686)
0
0
$2.63
Mandarin
95
1,359,185
65,639
65,639
4.8%
(8,139)
0
0
$6.06
Nassau County
104
3,249,274
100,523
100,523
3.1%
115,200
0
0
$3.52
Northside/Oceanway
216
1,036,6687
900,103
900,103
7.2%
74,127
0
0
$3.35
Orange Park/Clay County
194
5,131,484
277,490
277,490
5.4%
284,555
0
0
$5.06
Riverside
688
18,169,372
269,610
269,610
1.5%
494,270
510,433
67,025
$4.74
San Marco
224
3,912,845
127,413
127,413
3.3%
(6,331)
0
0
$4.61
Southside
99
1,115,671
12,948
12,948
1.2%
0
0
0
$5.30
St Johns
300
5,041,449
170,271
170,271
3.4%
87,700
0
0
$5.72
Westside
522
30,305,944
1,936,645
1,943,013
6.4%
94,292
237,319
23,201
$3.31
Totals
3,661
118,688,215
6,847,932
6,859,420
5.8%
1,457,059
747,752
98,877
$3.90
MARKET TOTAL
3,967
126,263,071
7,630,963
7,642,451
6.1%
1,415,167
747,752
98,877
$4.24
Source: CoStar Property
Significant Transactions in the Market | Q1 2016
Notable Industrial Sales
PROPERTY
SUBMARKET
Northpoint Industrial Park
SIZE
Northeast
409,322
6595 Pritchard Rd
Westside
4930 Spring Park Rd
San Marco
SALE PRICE
PRICE PER SF/AC
$258,362,819
$61.96/SF
131,070
$7,50,000
$57.22/SF
37,500
$1,785,000
$47.60/SF
Notable Industrial Leases
SUBMARKET
SIZE (SF)
12400 President Ct
PROPERTY
Westside
200,000
Renewal
TYPE
11070 Cabot Commerce Cir
Northside/Oceanway
110,137
New
159 E 21st St
Downtown
78,483
New
Northeast Florida Research & Forecast Report | Q1 2016 | Industrial | Colliers International
3
JACKSONVILLE INDUSTRIAL TEAM
Hobart Joost, Jr., SIOR
Principal | Northeast Florida
Guy Preston
Principal | Northeast Florida
Bart Hinson
Sr. Associate | Northeast Florida
Jeff Evans
Sr. Associate | Northeast Florida
Jonathon Scott
Associate | Northeast Florida
Transportation Network
Submarkets
Located in Northeast Florida on the Atlantic
coast, Jacksonville is a major transportation
hub.
Downtown: Primarily a waterfront industrial
district, Downtown’s existing inventory
includes warehouse/storage and port related
uses. Construction is rare as a result of little
developable land. Vacancy is consistently low
due to lack of new product and demand for
industrial space in proximity to the port.
554 offices in
66 countries on
6 continents
Northside: Most of the Northside’s industrial
activity in recent years has been taking place in
three large business parks - Northpoint, Imeson
International and Jacksonville Tradeport. This
trend should continue, supplemented by new
industrial projects on the Northside near the
new TraPac Terminal.
United States: 153
Canada: 34
Latin America: 24
Asia Pacific: 231
EMEA: 112
JAXPORT: The Port of Jacksonville currently
has three cargo terminals and one passenger
cruise terminal: Blount Island, Dames Point
and Talleyrand Marine Terminal and JAXPORT
Cruise Terminal. JAXPORT’s three marine
terminals handle every type of general and
project cargo and is the #1 U.S. port handling
trade with Puerto Rico. Just last year,
JAXPORT handled 8.2 million tons of cargo.
Roads: Local access to four interstands (I95, I-10, I-295 and I-75) provides distribution
along the entire U.S. East coast, the southern
tier of the nation to the Pacific coast, and
major sections of the South and Midwest. U.S.
Highways 1,17, 901 and 301 also provide a link
to the nation’s markets. I-295, Jacksonville’s
outer beltway, has been completed and
integrated into the Federal Interstate
Network and offers easy access to the Ports
of Jacksonville as well as to all parts of
Jacksonville within 30 minutes.
Rail: CSX, Norfolk Southern and Florida East
Coast service the area, offering connections to
the eastern United States and Canada.
Air: Jacksonville International Airport (JAX)
and six other regional airports open up the
world to business and leisure travelers with
more than 120 non-stop flights to 34 U.S.
cities, along with a network of major air freight
companies that move millions of pounds of air
cargo through JAX each year.
Westside: Jacksonville’s largest industrial
submarket is an attractive area for large
distributors and manufacturers due to existing
building supply and easy road and rail access.
Westside Industrial Park and Westlake
Industrial Park are currently producing most
of this submarket’s new warehouse and
distribution space.
Southside: This densely populated submarket
has seen intense competition for residential/
retail land use in recent years, thereby limiting
industrial development. Existing inventory
consists mainly of smaller, higher office
finish, multi-tenant industrial space. There is
an increasing trend on the Southside toward
mixed-use developments that include an
industrial component.
2.0
billion square feet
under management
Orange Park/Clay County: This submarket
features mostly small industrial structures
oriented toward servicing the nearby retail
industry.
Copyright © 2015 Colliers International.
The information contained herein has been obtained from sources deemed reliable. While
every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No
responsibility is assumed for any inaccuracies. Readers are encouraged to consult their
professional advisors prior to acting on any of the material contained in this report.
4
$2.5
billion in
annual revenue
Colliers International | Northeast Florida
50 N Laura Street, Suite 1725
Jacksonville, FL 32202
+1 904 358 1206
colliers.com/jacksonville
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