Jacksonville has a need for more speculatively built warehouses, especially at the 1 million-square-foot level, Cushman & Wakefield Managing Director Tyler Newman and Colliers Associate Director Seda Preston said Thursday.
And If the market doesn’t respond, Jacksonville will be less competitive compared to peer cities.
“Not having the 1 million square feet spec, we see deals that don’t even look at Jacksonville because they don’t have time to build to suit,” Preston said.
At least one new spec-built warehouse may be on the way: Cushman & Wakefield has a client who is close to closing on 80 acres of property near Southside Boulevard in the next 45 days.
Newman noted the buyer plans to construct a spec warehouse on the property and a trio of companies have already expressed interest in expanding there.
Newman and Preston shared their insights about Jacksonville’s industrial real estate market during the Chamber of Commerce Transportation and Logistics luncheon Thursday afternoon.
Both cited the Florida Logistics Park on Pritchard Road on Jacksonville’s Westside as an example of what the region needs: 1.75 million square feet is under construction, including a 1 million-square-foot space that is the largest spec development in the city.
The need for spec space, Preston and Newman said, stems from changes in e-commerce spurred by the pandemic.
“It is critical for our area to have warehouses,” Newman said. “We have to have developers build on spec.”
E-commerce accounted for $222.4 billion, or 13.3% of total sales, in the second quarter of this year according to the U.S. Department of Commerce. That is a 9.14% increase in dollars spent through e-commerce during the same period in 2020 and a 52.2% increase from the second quarter of 2019.
While there is a lot of industrial real estate activity on the Southside, Newman said it remains cheaper to build on the Westside, with prices being one-third of the price per acre on the latter than the former.
Jacksonville’s growth, as well as Florida’s perception for having a more business-friendly climate than other regions of the country have led to a surge in external investment in industrial real estate here.
“Jacksonville is going to be the low-cost comparison to some other pricey markets,” Preston said. “…With the low interest rates, it might make sense for investors to go into a value-add market."
Source: Jacksonville Business Journals