Jacksonville office market reports
The first half of 2022 fared well for Jacksonville’s office sector with the market experiencing strong leasing activity, a drop in sublease availability, and a continued decline in the unemployment rate. As companies readjust their real estate needs, they are scooping up sublease space in highly amenitized, class A buildings.
There is currently 228,764 square feet (sf) of class A office space under construction in Jacksonville; however, there are eight buildings in the pipeline totaling 1.7 million square feet (msf) yet to break ground. JEA will occupy the entire 153,000-sf building at 325 West Adams Street, which will likely boost net absorption once it delivers.
Net absorption remained in negative territory at the end of the second quarter with year-to-date net absorption totaling -213,776 sf. One major event that contributed to the negative absorption was the Adecco Group downsizing from 144,000 sf to about 90,000 sf after restructuring the company’s office layout to adapt to a hybrid work approach.
Direct asking rent
Tenants are continuing to flock to class A office buildings with highly amenitized spaces to lure employees back to the office. Landlords have been forced to increase rates to offset the improvements made to the buildings.
Although overall availability is close to all-time highs, sublease availability is the lowest the market has experienced since 2015, with about 500,000 sf available. During the second quarter, there were no large subleases that were put on the market.
The overall vacancy in the Jacksonville market is 18.1%—most of which is concentrated in the I-95/9A Corridor with 2.7 msf vacant. The Adecco Group’s vacancy from its 144,000-sf space was the largest move out-of the quarter.
The overall price per square foot (psf) for office investments is up 47% from the end of the second quarter of 2021. However, sales volume is the slowest the Jacksonville market has seen since 2016, with only $62 million year-to-date.
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Get in-depth office market reports from commercial real estate experts in the Greater Jacksonville area. Avison Young advisors look at Jacksonville commercial real estate activities and the latest Jacksonville statistics to provide you expert market research on Jacksonville's office properties.
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