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JACKSONVILLE, FL-With continued economic expansion and the lack of new construction, real estate officials are predicting that conditions in this office market will improve throughout 2008, according to market reports. Job growth is expected to increase by 1.2% with the addition of 7,800 new positions, while only 33,000 sf of new space is expected to be completed during the year, according to the 2008 National Office Report by Marcus & Millichap.

“The Jacksonville investment market will remain active during 2008, as buying activity is driven by investors seeking to place capital within an improving metro,” says Steven Ekovich, regional manager of Marcus & Millichap’s Jacksonville office.

First-quarter results seem to support predictions of improved conditions. According to a CB Richard Ellis office market report for Jacksonville, vacancy declined slightly through the first three months of this year to 13.3%, down from 13.8% during the same period in 2007. Although lower than in previous quarters, net absorption within Jacksonville’s office market remained positive at approximately 26,342 sf, according to the report.

Average asking rents dropped slightly during the first quarter, dropping from $18.42 to $18.19 per sf after remaining stable throughout 2007, according to CBRE. Asking rents for class A space in Downtown Jacksonville remained at approximately $20 per sf.

CBRE takes a somewhat dimmer view of the prospects for 2008, predicting that sublease space coming to the market will impact vacancy rates. “Although the vacancy rate has remained stable since last year at this time, we are seeing an increase in sublease space and this will affect the vacancy rate in the upcoming quarters,” says senior associate Traci Jenks.

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