Commercial real estate ends 2015 with a question: When will the Jacksonville market see significant development of more office space?
The answer could be around the corner in 2016.
Existing office buildings and business parks are filling up as the year ends. Southeastern Grocers, Citizens Property Insurance Corp., Deutsche Bank, PHH Mortgage, Fidelity Investments, Ameris Bank and SunGard are among the many companies moving and expanding.
New companies to town, such as Macquarie Group of Australia and Resource Solutions of the United Kingdom, not only are taking space but represent an international expansion.
Office parks continue to renovate and provide more space. The Bank of America office campus along Southside Boulevard is opening up for tenants, and Prominence in Baymeadows is leasing as it renovates.
Downtown office buildings saw movement as law firms and other professional services firms moved and expanded, including relocations from the suburbs.
The collective movements indicate that if a tenant needs more than 150,000 square feet of space, a developer might need to start a build-to-suit.
As for speculative office space, there’s no indication a big project is coming, but developers are planning smaller projects to meet tenants’ needs.
If a tenant needs a large build-to-suit, developers no doubt will negotiate one.
Money continued to change hands in 2015 as investors continued buying occupied office and industrial buildings, and more sales are expected in 2016.
On the industrial side, big occupied buildings brought in big prices. For example, buildings leased to GE Oil & Gas, FedEx Ground Package System, Coach and Samsonite sold for a combined almost $227 million. Investors nationwide with money to invest will continue shopping.
That also raises the question whether the prices will lead to real estate tax increases that will be passed on to tenants.
Investors also are buying smaller properties, and more sales are expected.
Developers continue to build industrial, warehouse and distribution buildings, including on spec. Hillwood Investment Properties likely will start another speculative building at Cecil Commerce Center.