Jacksonville Office Absorption Rallies

After being hit with negative absorption of 42,223 sf in 2003, the overall Jacksonville market recovered in the last two periods of 2004, shaving the total to a negative 26,489 sf. However, vacancy has climbed to 14.1% from 12.7% at year end 2003 as central business district merchants and offices continue their flight to the suburbs.

The study suggests the opening last week of the $158-million, 120-store St. Johns Town Center by Simon Property Group Inc. and Ben Carter Properties LLC and the city's Super Bowl image may generate new office development interest over the entire area.

But with 1.16 million sf of new space under construction, the vacancy level among 1,057 buildings is expected to grow and the rent range could drop below its average $17.31 per sf, the report concedes. Still, the report finds the rent average encouraging, stating Jacksonville "commands rents similar to larger markets in the Southeast."

A total five million sf is currently vacant. Only 390,092 sf of office product was delivered at year end 2004. Two of the largest leasing deals completed last year were Wachovia's 110,000-sf lease in Metro Square Office Park and the 60,000-sf deal signed by Citizens Property Insurance at 95 Corporate Center.

Looking ahead, the Advantis report is optimistic that new communities being developed on the outskirts of the city "will sustain new office growth into 2005 and contribute to a solid foundation for future activity." Among the new shelter projects are Palencia, Bartram Park, Julington Creek and World Golf Village.