By Ivanna C. Sukkar
Photo: Ken McCray
The key to Jacksonville, Fla.’s future could be nearly 1,500 miles away.
as expansion of the Panama Canal nears its projected completion in 2014, Florida’s largest city is poised
to benefit. according to Colliers-Dickinson, Jacksonville will be the east Coast’s first port of call for the
new larger ships that will fit through the expanded canal. This is expected to increase foreign trade and
warehouse distribution space in the city, Colliers says.
in addition, this past May, the U.S.
army Corps of engineers announced
that nearly $15 million of the government’s economic-stimulus funds
heading to Jacksonville will be used
to deepen the harbor for larger ships.
What the Locals Say
“i think Jacksonville could be a leader in a lot
of things, especially with the port [expansion].
infrastructure money could definitely be used here. i
see a lot of growth potential, but i don’t see it growing
unless we have money to grow with.”
— Marcus F. Davis, broker, Re-Source Capital Mortgage Inc.
This will bring an “industrial boom,”
Colliers says — and looking at the
past year’s activity, Jacksonville
seems to be preparing. The volume of cargo handled at the city’s port increased 1 percent in 2008 over ’07,
according to Marcus & Millichap. and several warehouse and distribution developers are vying for locations
near the port’s facilities and major highways, according to Colliers. With demand for industrial space in Jacksonville expected to increase in the next few years, brokers in this sector may be well-positioned to help.
Population in 2000: 735,617
Rank (U.S.): 12th-largest
Metropolitan-area population: 1.3 million
Metropolitan-area rank (U.S.): 40th-largest
average commute: 23. 9 minutes
Average commute in 2000: 25.2 minutes
U.S: 25. 3 minutes
Median household income: $48,699
Median household income in 2000: $40,316
Median age: 35. 9 years
Median age in 2000: 33. 8 years
U.S.: 36. 7 years
unemployment: 9. 5 percent
Unemployment in March 2008: 4. 8 percent
U.S. (March): 8. 5 percent
inflation (Consumer Price index): -1.4 percent
Inflation in March 2008: 5. 5 percent
U.S. (March): -0.4 percent
office (asking): $18.45 per square foot
office (effective): $14.68 per square foot
Asking: $15.55 per square foot
Effective: $13.22 per square foot
Asking: $800 per unit
Effective: $756 per unit
industrial: $4.61 per square foot
office: 18 percent
retail: 8. 8 percent
apartment: 12. 7 percent
industrial: 7. 3 percent
net office: -193,000 square feet
net retail: -77,000 square feet
apartment: -554 units
net industrial: 921,399 square feet
office: 0 square feet
retail: 43,000 square feet
apartment: 312 units
industrial: 1.5 million square feet
Demographics: 64 percent white, 31 percent black, 3
percent Asian, 2 percent other; 6 percent identify as Hispanic
Largest private employers: Blue Cross and Blue Shield
of Florida, Publix Super Markets Inc., Winn-Dixie Stores Inc.,
Baptist Health of Northeast Florida, Citigroup
3rd-cleanest U. S. city ( Forbes magazine)
9th-least-stressful U.S. metro area ( bizjournals.com)
bizjournals.com, CB Richard Ellis, Colliers Dickinson, The Florida Times-Union, Forbes magazine, Jacksonville Economic
Development Commission, Marcus & Millichap, Reis Inc., U.S. Census Bureau, U.S. Department of Labor, University of North Florida
Local Economic Indicators Project
ivanna C. Sukkar is senior associate editor at Scotsman Guide. Reach her at (800) 297-6061 or email@example.com.
Worst still to come for retail
By Victor Calanog,
director of research, Reis Inc.
Based on fourth-quarter-2008 data, we noted in this past
March’s Property TypeCast (
that we may not see stabilization and recovery in the retail
sector until well into 2011. Judging from results from the
first quarter of this year, our near-term outlook holds.
in fact, the performance of neighborhood and community
shopping centers — i.e., small to midsized centers — deteriorated considerably in the quarter. These centers’ negative net absorption of 8. 25 million square feet in the first
quarter is the largest such negative-net-absorption figure
since 1980. These retail centers returned about as much
space to the market in the first quarter as they did in all
of 2008. Their national vacancy rate also increased to 9. 5
percent from 8. 9 percent.
Larger retail properties, such as regional and superregional
malls, experienced an 80-basis-point occupancy decline,
pushing vacancy levels to 7. 9 percent — the highest level
since reis started tracking malls in 2000.
average asking and effective rents for small to midsized
centers also witnessed their largest single-quarter decline
since reis began publishing quarterly performance data in
1999, with average asking rents dropping 0.6 percent in the
first quarter and effective rents dropping 1.8 percent. at
regional malls, asking-rent levels fell by 1.2 percent, also
a record dip.
net absorption (millions of sq. ft.)
Net Absorption Vacancy
- 13 6. 7
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
2005 2006 2007 20082009
vacancy rate (%)
Source: reis inc.
The magnitude of these declines may come across as staggering. But the downward trajectory might not be as surprising considering other economic indicators. retail sales are
down by 0.4 percent for april, according to the U.S. Department of Commerce, with March sales revised downward, as
well. Continuing decreased demand from households and
businesses, high debt levels, and eroding net operating income put tremendous pressure on retail properties.
relative to the multifamily and office sectors, we’re least
optimistic about the near-term prospects of retail properties. We expect small and midsized shopping centers to
continue their historic decline through 2011, with vacancies increasing to 10. 8 percent later this year.
Vacancies should hit 11. 8 percent by 2010 and top off at
12. 6 percent in 2011. We project asking- and effective-rent
growth of negative-2 percent and negative- 3.1 percent, respectively, this year. all of these projections exceed historic figures for previous downturns.
Victor Calanog, director of research at Reis Inc.,
writes a monthly column on property types for
Scotsman Guide. As head of Reis’ core economics
team, he is responsible for data models, forecasting,
valuation and portfolio services for clients in commercial real estate. Reach him at victor.calanog@
reis.com. Faruk Ozdemir, team leader for Reis’
quality-control team, contributed to this article.