It's been a tough start to the year for industrial performance in Jacksonville. The city had -261,925 square feet of absorption in the first quarter, marking the first time since 2019 that the category slipped to negative territory, according to a market analysis report from CBRE.
That came as major tenants including Southeast Toyota, Confidential, DL Cabinetry, and Miami Warehouse Logistics vacated 114,645 square feet, 120,711 square feet, 108,000 square feet, and 80,000 square feet, respectively. That in part played a role in the total vacancy in the market increasing 180 basis points year-over-year to reach 6.9 percent. Another reason for the vacancy was construction completion totaling 4.3 million square feet, with 2.7 million square feet left unoccupied, according to CBRE.
It also wasn't much prettier on the leasing front. There were just 42 deals completed for 1.2 million square feet, versus 65 for 1.58 million square feet in the same period a year ago.
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Meanwhile, there was one piece of good news. The average leasing rate jumped by 10 percent to $8.72 per square foot NNN in Jacksonville. The Beaches submarket stood out with its prices hitting $16 per square foot. The Westside had the lowest rates, at $7.63 per square foot.
But going forward, CBRE said that the unknowns with the U.S. trade policy and how it will impact the economy are painting a foggy picture for the city's industrial sector.
"There are still a number of obstacles facing the industrial market in 2025, effects of the federal government using tariffs as a tool for trade and the effects of higher interest rates over a longer duration than anticipated," CBRE wrote.
"These short-term obstacles will have a significant impact on how landlords and tenants respond in 2025."
Citing labor statistics, Jacksonville's unemployment rate was 3.8 percent in February. While that's 60 basis points higher than a year ago, it outpaces the national average of 4.1 percent.
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