Population growth in Northeast Florida and changes in consumer-spending habits have led to a healthy industrial real estate market, says Christian Harden, managing partner at NAI Hallmark.
Supply chains began migrating closer to the consumer years ago, but an increase in online sales during the pandemic has propelled industrial real estate, investment sales and industrial leasing “off the charts,” he says.
“Ten years ago, Amazon had a couple of regional locations,” says Harden. “Now you probably have four or five in every major metropolitan market in Florida.”
Though the market is growing throughout the state, Northeast Florida is probably the fastest growing, Harden says, because of efforts to position the region as a transportation and logistics hub.
As other parts of the country are experiencing supply chain issues, JaxPort is lobbying to divert container cargo traffic to its port. A harbor-deepening project, scheduled for completion this month, will further increase the amount of consumer goods coming into the region. In the next few years, as the port increases its cargo intake, the demand for warehouses and distribution centers will only increase, Harden says.
Not only will major online retailers need space for distribution centers, but the retailer’s suppliers will also need warehouse space to move their products to the distribution centers faster.
In addition to rerouting established supply chains, the pandemic has also changed office space needs for businesses, but it will be years before we know exactly how, he says. “Office leases tend to be for five to 10 years, so I think businesses will probably deal with it when their leases come up for renewal.”
Some companies that have vacated spaces during the pandemic have been able to sublease to many small businesses moving to Jacksonville from colder climates, like New York, Wisconsin and Illinois, Harden says. “They don’t want to wait nine months to design, get a permit and construct a space, so they’ll take a sublease space that offers quick access to market.”