Jacksonville is not seeing enough new development of industrial space to keep up with the demand the market is experiencing, according to a quarterly report from Colliers International Northeast Florida.
The vacancy rate dropped below 3 percent in the second quarter, and average lease rates increased to $4.95. By comparison, only two quarters ago, vacancy was at 4.6 percent and average lease rates were at $4.44, according to Colliers data.
The report said that despite “overwhelming evidence” that the local market needs new warehouse space, there is a relatively small amount of construction underway. Colliers calculated about 760,000 square feet of space was under construction in the past quarter, the majority of which was being developed by Jackson-Shaw, Becknell Industrial and Patillo Industrial Real Estate.
“We are finding that most users that are looking to expand in North Florida have an immediate need and are not willing to wait 9-12 months for a new building,” the report said. “Unfortunately, many find themselves without a choice.”
On the bright side, Jacksonville is seeing more interest from out-of-town developers who are drawn to the area by the increased demand and the ease with which they can purchase land here.