SOUTHEAST SNAPSHOT, FEBRUARY 2011

Jacksonville Industrial Market

For the second consecutive quarter, market conditions for Jacksonville industrial space have improved.  More deals got signed and there were no increases in availability despite some significant move-outs. Is this confirmation of our road to recovery?

For the second straight quarter, move-ins exceeded move-outs by almost 38 percent. The fourth quarter, which is typically a slow time of year with the holidays, saw move-ins increase almost 27 percent from the previous quarter and reaching its highest level since the second quarter of 2008. During the fourth quarter, 124 available industrial spaces were newly occupied while only 77 spaces were given back to the market. The number of move-outs for the quarter was at its lowest level since the fourth quarter of 2008.

Velocity of deal flow continues to improve, up 27percent from the previous quarter and the highest level since the second quarter of 2008.

Availability of industrial space remained the same with 20.5 million square feet while 21.3 percent of the inventory is actively being marketed. Space coming back on the market totaled almost 1.8 million square feet. Almost 45 percent of that total consisted of three spaces, each of which where more than 250,000 square feet. Activity decreased slightly to 1.2 million square feet which reflected an average size deal of just more than 9,000 square feet.

Absorption figures, on the surface, continue to be troubling. As indicated above, several large move-outs contributed heavily to an increase in negative net absorption. Those three spaces totaled more than 900,000 square feet. Without those, it would have been a different story. Net absorption came in at -621,802 square feet for the fourth quarter.  

Deals of note included C&R General Contractors, Spec Building Materials, The Filing Source, Comcast, Mission Harvest America and Air Van Inc.

In summary, the Jacksonville industrial market finished the year with two consecutive quarters of more positive news than negative.  Companies appear to be moving forward with buying and leasing of space, which is something they have not done in almost two years.  Transactions and activity are on the rise and industry professionals appear to be busier. This is all better news.

— Jeff L. Graham, SIOR, is the president of King Industrial Realty of Florida/CORFAC International in Jacksonville, Florida.

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