In part two of our Skyline series, we move up the state to take a deeper look at the skylines that make up the downtowns in Central and North Florida (click here to read Part One: South Florida). JLL recently launched its 2017 Skyline, a comprehensive report that analyzes supply, demand, rent and investment data across the country’s urban cores, with three of the profiled Skylines in Central and North Florida.
The office Skyline report focuses on the upper crust of the office market and looks at some of the most iconic and highest-rent properties within each city’s downtown. These “trophy towers” provide insights into the trends that shape cities. For the full interactive report and to view Skylines nation-wide, visit www.skyline.JLL.com.
Moving from South to North, here is a breakdown of Florida’s remaining three Skylines and the most important trends impacting the urban cores:
Years of strong leasing activity have created a supply squeeze for office space in downtown Tampa. The 2017 Skyline clearly shows total vacancy in Tampa’s skyline is at an all-time low and is expected to decline even further this year.
Strong tenant demand has made large blocks of office space virtually non-existent in Tampa’s urban core, with only five availabilities over 20,000 square feet. As such, Drew Gilligan, JLL Senior Research Analyst in Tampa says, “the Skyline continues to experience significant rent growth [which has been] buoyed by Class A product.”
Orlando’s Skyline set continues to outperform the overall market. “Asking rates have jumped noticeably as vacancy rates in the Orlando Skyline buildings have dropped below 10% for the first time in a decade. With only one new project on the horizon, this trend is expected to continue for the next several years as landlords take advantage of the limited blocks of space in the Skyline buildings,” said JLL Managing Director John Gilbert. Direct average asking rent sits at $26.50 per square foot, but are still below peak levels seen prior to the recession. And while vacancy is hovering around record low levels, possible new development and a glut of sublet space put on the market by legal tenants could shift fundamentals.
Jacksonville’s skyline still has room for growth. New research shows that large block opportunities remain in the Jacksonville CBD. With recent interest in the market concentrated in the suburbs, space has lingered on the market downtown. However, with the recent distressed sale of One Enterprise Center, a turn-around opportunity may be possible if the owner invests in substantial upgrades.
“Fundamentals for the Class A central business district market in Jacksonville vary significantly by building, with occupancies ranging from nearly 90 percent down to 50 percent. Large block space over 150,000 square feet can be secured at three separate buildings in the CBD currently, but with the continued tightening of the suburban market along with the vibrancy of the adjacent Brooklyn area and Sports districts taking shape, we expect users will increasingly consider the CBD for future sizable requirements,” said Michael Loftin, JLL Executive Vice President.