Jacksonville may be Florida’s largest city by population, but the coastal enclave at the state’s northeastern tip often gets overlooked in favor of Miami-Dade, Orlando and other tourist destinations.
The reality is that Jacksonville is quickly emerging as a desirable business and residential destination due to a number of factors and trends.
In July, Forbes Magazine named Jacksonville the No. 2 city in the U.S. that Americans were moving to, based, in part, on its low unemployment rate (4.4%) and median home price ($272,400).
Jacksonville has been steadily moving toward that designation for several years by attracting new international business, expanding existing companies’ footprints, bolstering its workforce through education, advocating for necessary municipal improvements by reducing its debt, and highlighting the advantage of its military and water-based shipping resources.
Jacksonville’s progression to meet the demands of today’s business community is a case study for other metropolitan areas in Florida and across the U.S.
Changing Office Strategy
Low property values and lower-than-average rental rates for office space could be viewed as possible deficits. Jacksonville has instead leveraged these factors to attract employers looking to relocate or expand.
The region’s most recognized businesses fall in the banking, insurance, healthcare and logistics sectors. While such companies traditionally required large footprints, many are taking advantage of the area’s affordable market by densifying to create more “we” space and less “me” space.
The traditional office has been transformed into smaller cubicles and/or bench seating with more open areas for collaboration. Areas that were often wasted, such as hallways, corners, even break rooms, are being turned into conversation areas.
Adding High-Paying Jobs
Jacksonville has a long history of plentiful back-office business opportunities. However, the addition of new employers is creating a shift to the front of the office.
In 2015, according to census data and newspaper reports, Duval County’s median income was $45,778 – a more than $2,000 reduction since 2013 and more than $1,600 less than the current state average.
That same year, two large international financial companies – Deutsche Bank of Germany and Macquarie Group of Australia – announced plans to enter or expand in the region. At the time, Deutsche already employed about 1,700 people but its announcement promised an additional 350 new jobs by the end of 2017, with the possibility of another 750 jobs to come.
In July 2015, Macquarie Group revealed its intent to open a downtown location by 2016 and add 123 jobs by the end of 2017 with an average wage of $64,000.
In another major investment, business management consultant Ernst & Young revealed in March 2016 it was developing a client services center in Jacksonville with plans to add 450 jobs through 2020, mostly in the information technology and financial consulting fields.
Increased job opportunites and salaries are expected to positively impact all sectors of Jacksonville’s market over the coming years.
Freeing Up Funds for Capital Improvements
In late August, voters approved a sales tax referendum to add a half-cent sales tax, effective in the year 2031, to help pay down Jacksonville’s $2.7 billion pension debt.
If all goes as planned, the city will add between $40 million to $68 million to the budget annually. The funds could be used to create more incentives, fund new capital improvements and attract businesses.
Playing Up Resources
Jacksonville’s proximity to the water has always been one of its brightest resources.
The region is home to two U.S. Navy bases – Blount Island Command and Naval Submarine Base Kings Bay. The increased military presence is a boon for Jacksonville. The two bases spin off an estimated 6,000 military personnel – attractive job candidates to companies because of their training and military service. Plus, active-duty personnel often have spouses who relocate with them who also need employment.
Overall, the outlook is bright for the Jacksonville market over the next year as a result of rising demand from existing and new-to-market companies in growth mode, stronger economic conditions and the city’s commitment to investing in capital improvements.
About the Author
As a Vice President for the JLL corporate office in Jacksonville, Florida, Jesse Shimp provides brokerage services to clientele in the Northern Florida region. He serves the needs of office users through tenant representation services including cost and risk management related to real estate occupancy, strategic planning and lease negotiations. He is equally charged with providing agency leasing and marketing expertise to asset owners of Jacksonville’s premier office properties. Having an established history with both landlord and tenant clientele, Jesse effectively addresses the requirements of either side of the brokerage transaction and is continuously expanding JLL’s presence in the region. Contact Jesse.