There is a fresh drive among residents, businesses and leaders of Jacksonville to create a thriving and vibrant downtown to rival similar cities of its size across the US. This push is spurred by momentum from Florida’s positive economic influences and local economic wins, as well as national real estate trends. While the last decade has brought much of the same for the Central Business District’s (CBD) office properties and vacancy rate levels, the birth of a few new major developments has made now the time to get excited about downtown Jacksonville’s future.
Excitement is Building in Downtown Jacksonville
Jacksonville’s downtown has always had potential to flourish: residents and business owners alike have long treasured its natural beauty, history and vivid arts and culture scene. Recently though, there has been a bigger push to incorporate the ‘live, work, play’ mantra into the development of downtown. Incorporating that sentiment into the foundation of new developments, many of downtown’s recent major projects are capitalizing on that momentum with mixed-use features. Entertainment and sports venues like Daily’s Place and the sports complex (not to mention others underway and planned) are bringing people downtown on the weekends, and neighbors like the Doro building’s Intuition Ale Works and Manifest Distillery are giving them reasons to stick around.
There are also longer-term projects that are building excitement around the future of downtown. Jacksonville Jaguars owner Shad Khan is undertaking a major redevelopment of The Shipyards to connect the sports complex to downtown. The District, a health and wellness focused mixed-use development, will be home to the CBD’s first new hotel in 16 years. According to the 2016-2017 State of Downtown Report, almost 8,600 people currently live in downtown. That number is projected to increase to almost 14,000 (a 63% increase) within the next decade, if the proposed projects progress as planned.
This makes marketing the CBD to employers natural. While the suburbs have had the highest demand from employers and residents alike over the past several years, there has been a noticeable rejuvenation of interest in downtown following recent deliveries of new multi- family and retail openings. Limited existing availability in the suburban office market has led to suburban market rate increases, is making downtown that much more attractive to businesses looking for space. A desire for city living, guided by millennials, is creating a demand for all the components of the ‘live, work, play’ mantra to come together in a vibrant downtown. Greater metropolitan communities are looking for attractive downtowns because that excitement oozes out into the suburbs. Downtown offers employees access to a walkable, mixed-use environment that many are craving today – if a company wants to make its mark on Jacksonville, taking residency downtown is the way to accomplish that.
Opportunities for Employers
Jacksonville today is home to a rising commercial real estate market. With a current vacancy rate of 12.4% and a gross average asking rent of $19.55 per square foot, the market dynamics are strong. Currently, the Bank of America Tower, SunTrust Tower and One Enterprise Center all have about 150,000 square feet of available prime office space on the north bank of downtown Jacksonville. Employers should be aware of the positive factors and fortuitous timing when considering new office spaces for lease. Having a healthy supply of quality office space that can be provided to tenants in large blocks can actually be advantageous for Jacksonville: any companies looking to potentially move their headquarters or open regional headquarters here have CBD space with signage opportunities available. We foresee the CBD’s vacancy rate continuing its decline over the next few years as some of the above-mentioned entertainment, cultural and residential projects come to fruition. We remain excited to follow the evolving improvements in downtown Jacksonville and look forward to the continuing transition in the years to come.
Michael Loftin joined JLL in 2017 as Executive Vice President. His role includes both agency leasing for institutional office owners in various submarkets throughout Jacksonville, along with tenant representation work. Prior to joining the firm, Michael was a Managing Director for Banyan Street Capital, where handled leasing oversight and asset management for a portfolio of office properties totaling approximately five million square feet in various cities throughout the Southeast. He is an active member of NAIOP (Commercial Real Estate Association) and has served on several of its committees, and was an active Board member of the Deerwood Park Property Owner’s Association for nearly six years. Email Michael.