Industrial Properties Most Sought After Assets in the Jacksonville Region
Despite the economic challenges inflicted by the coronavirus, deals are still getting done.
A leading global commercial real estate company is expecting the northern Florida industrial market to have occupancy levels and market rents soften modestly moving forward. The projection is reflective of the continued introduction of supply and slightly muted demand in the region.
Colliers International expects this outcome as the reopening of the economy in the late second quarter has calmed investor’s nerves and led to an increase in activity in the north Florida industrial market since April due to the challenges inflicted by the coronavirus.
Positive indicators in data showed that the steady recovery is part of a larger trend in the north Florida industrial market. The industrial market remains lucratively valued in the northern portion of the state compared to upper-tier markets. The report stated that investors should expect the industrial class to stay stable and continue its resilience in the next quarter.
But, the report warned that the progress made since the late second quarter would not come without setbacks brought upon by the coronavirus. For instance, lease activity on big-box industrial facilities appears to have slowed compared to its previous breakneck pace, and vacancy is at 5.7%, which is 60 basis points higher than the last quarter.
Despite the economic challenges inflicted by the coronvirus, deals are still getting done. The report specified the most notable delivery as a 477,946-square-foot distribution center developed by Webb International at 250 E. Busch Drive and delivered in April. A single user can use the space, or it could be divided into 75,000-square-foot spaces.
But, moving forward, the market in Jacksonville will face a limited supply of available large tracts of industrial zoned land, creating a barrier in the acquisition of land suitable for expeditious, ground-up construction of big-boxed industrial space.
From a capital markets perspective as a whole, industrial assets in northern Florida remained in high demand despite the uncertainty and capital limitations brought on by the coronavirus. The report stated: “Industrial properties remain the most sought-after assets in the Jacksonville region.”