Last year marked a minor reset year for Jacksonville industrial, especially after coming off a record three-year run between 2021 and 2023.
The market ended 2024 with 7% vacancy without sublease activity and 7.3% if factored in. Additionally, for end-of-year 2024, there was 4.2 million square feet of lease activity (new leases signed specifically), more than 3 million square feet of new product built, and Jacksonville registered just more than 8 million square feet worth of industrial tenants interested in taking space within the market.
When we compare these metrics to the three prior years, there’s a decrease in demand and an increase in vacancy.
However, this demand decrease was to be expected and isn’t a cause for concern or any indication of an impending doom and gloom period.
The market experienced all time demand highs from 2021 to 2023 due to changes in consumer e-commerce habits and major population increases across the region. Most of the demand was met by adding more than 13 million square feet of space for this period. The vacancy rate increased with new construction completions and very few tenants left Jacksonville.
The pace of development has slowed slightly compared with previous years, but there’s still a significant amount of industrial product under construction.
Currently, about 4.1 million square feet is under construction and that is expected to increase to more than 5.2 million square feet by the end of Q1 2025 with other projects starting as the year progresses.
The good thing is the year ended with just more than 8 million square feet of tenants looking to lease space in the region, 58% of which are new-to-market.
Not all these tenants will land in Jacksonville, but the market does have the lowest lease rates compared with other major Florida markets.
Typically, larger users consider other Southeast locations and occupiers in general also consider other supply chain related factors when choosing space.
Despite the number of tenants in the market decreasing slightly during the first month of 2025, there is a lot of optimism to offer for commercial real estate and the industrial sector.
And if we compare our current tenant demand to pre-peak levels, our market is still in a very good position.
Tyler Newman specializes in the buying, selling and leasing of commercial industrial property in the Jacksonville metro market.