Can Jax Compete for E-Commerce Warehouses?

ORLANDO—Central Florida seems to have the corner on the market when it comes to e-commerce warehouses. But could Jacksonville take some of the momentum?

GlobeSt.com caught up with Terry R. Quarterman, a first vice president at CBRE Industrial Properties, Jacksonville to get his thoughts on industrial trends, including the competitive question, in part one of this exclusive interview. Be sure to come back later this week for the second installment.

GlobeSt.com: What have been the main trends in the industrial market?

Quarterman: Industrial Inventory has continued to fall resulting in a slight increase in lease rates. The vacancy rate for the third quarter of 2015 was 8.3%, the seventh consecutive quarter the market experienced declining vacancy, with sale prices increasing as well.

Industrial investors remain interested in Jacksonville as long as they can find quality properties with strong credit or properties with substantial upside.  Jacksonville's strategic location in the Southeast offers distribution operators a six-hour transit time to most major Southeast markets.

CBRE recently arranged a 240,000-square-foot lease for Calavo's new manufacturing and distribution center for this reason. We anticipate asking rates will increase as demand and existing vacancies are absorbed.

GlobeSt.com: What are some of the most significant deals that have happened recently?

Quarterman: Two of the biggest deals involved Sub-Zero Group, which manufactures luxury kitchen appliances, and Aqua Gulf Transport, a third-party logistics company. Sub-Zero consolidated its Atlanta and Orlando distribution centers into a 120,000-square-foot warehouse in North Jacksonville. Aqua Gulf expanded its operations by buying a 62,390-square-foot distribution center. CBRE represented Aqua Gulf.

GlobeSt.com: As e-commerce companies continue to target Florida, demand is growing for distribution centers and available space is tightening up. How is Jacksonville faring in comparison to other Florida markets?

Quarterman: E-commerce retailers focus primarily on the Central Florida market in order serve the state's population areas of Central and South Florida. Wal-Mart is building a new 1,000,000-square-foot e-commerce fulfillment center in Polk County between Orlando and Tampa.

Trader Joe's has completed an 850,000-square-foot distribution center in Daytona. Orlando to Tampa along the I-4 corridor is where e-commerce has the most interest. Jacksonville is too far north to be a serious contender for most e-commerce operators.