News Summary
Jacksonville’s industrial market is showing signs of cooling in Q1 2025, attributed to uncertainty over tariffs and a decline in leasing activity. The average vacancy rate remains stable at 6.67%, with rental rates dropping to $8.90 per square foot. Concerns about tariff impacts are causing businesses to reconsider leasing decisions, with local demand still strong despite cautious approaches from large corporations. Strategic shifts are taking place as companies seek smaller spaces, particularly as the area benefits from proximity to port operations. Despite challenges, a robust development pipeline signals growth ahead.
Jacksonville’s Industrial Market Experiences Cooling Effect in Q1 2025
Jacksonville’s industrial market showed signs of cooling in the first quarter of 2025 due to the uncertainty surrounding potential tariffs and a decline in leasing activity. According to data from six prominent real estate firms, the average vacancy rate in industrial and warehouse buildings has stabilized at 6.67%, remaining nearly unchanged from the 6.68% recorded at the end of 2024. The average rental rate in the area has also decreased from $9.23 to $8.90 per square foot compared to the previous year.
During this period, vacancy rates ranged between 5.4% and 9.7%, depending on the measurement method employed, while rental rates varied from $7.84 to $10.84 per square foot. Companies such as CBRE, Colliers, Cushman & Wakefield, Foundry Commercial, JLL, and NAI Hallmark contributed insights that highlighted these trends.
Impact of Tariff Uncertainty
The optimism that followed recent elections has been overshadowed by ongoing discussions regarding tariffs. Colliers pointed out that some businesses are choosing to repatriate operations due to heightened tariff concerns, while others are postponing decisions due to uncertainties about costs. Additionally, lease-up times for newly completed buildings have surged, increasing from an average of eight months in 2023-24 to as much as a year for certain projects.
Despite these challenges, local and regional businesses continue to drive demand for industrial space. However, large multinational corporations are taking a cautious approach to leasing decisions, largely influenced by shifts in international trade policies.
Strategic Advantages and Market Shifts
Jacksonville’s advantages include extended wait times and limited rail access to the Port of Savannah, establishing the area as a growing hub for businesses seeking proximity to port operations. This shift has prompted companies to relocate from more expensive regions in the Northeast and South while favoring spaces that cater to small-bay tenants requiring facilities of up to 25,000 square feet.
The largest industrial markets can be found in West Jacksonville and North Jacksonville, which feature inventories ranging from 53.2 to 64 million square feet and 32.7 to 46.9 million square feet respectively.
Notable Trends in Leasing Activity
Cushman & Wakefield identified a year-over-year decrease in new leasing activity for Q1 2025, despite a slight uptick from the previous quarter. The Westside and Northside submarkets accounted for approximately 79% of total transaction activity. Overall, only 42 leases were executed, covering 1.2 million square feet in Q1 2025, a significant drop from 65 leases totaling 1.58 million square feet in Q1 2024, resulting in an average lease size of 27,816 square feet.
Future Outlook
Despite limited activity, Colliers reported the completion of 1 million square feet of industrial space in Q1 2025, with an additional 5.1 million square feet currently under construction. The development pipeline indicates that 6 million square feet is expected to be delivered throughout the year, as demand continues to exceed 8 million square feet. New developers are expressedly seeking land to accommodate this demand.
Foundry Commercial remains optimistic for the year ahead, attributing this anticipation to Jacksonville’s resilient local economy and the rising population in Florida. The logistics sector plays a significant role in Jacksonville’s economy, accounting for at least one in six non-farm and non-government jobs in the counties of Baker, Clay, Duval, Nassau, and St. Johns.
Current Employment Trends
As of the latest data, around 120,200 jobs are associated with key industries such as manufacturing, wholesale trade, and transportation, warehousing, and utilities. This represents 16% of the 731,400 private jobs in the metropolitan area. Although employment figures in logistics have shown a slight decline from March and the previous year, these numbers are subject to monthly fluctuations, highlighting the evolving nature of Jacksonville’s industrial market.
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Additional Resources
- Jacksonville Daily Record: Northeast Florida Industrial Market Cooling Off
- Wikipedia: Jacksonville, Florida
- Colliers: Jacksonville Industrial Market Report Q1 2025
- Google Search: Jacksonville industrial market
- JLL: Industrial Market Statistics & Trends
- Google Scholar: Jacksonville industrial market
- Commercial Café: Merritt Completes Leasing Jacksonville Industrial Park
- Encyclopedia Britannica: Industrial Real Estate
- Business Wire: Faropoint Completes $105 Million Off-Market Acquisition
- Google News: Jacksonville industrial market news
Author: STAFF HERE JACKSONVILLE WRITER
The JACKSONVILLE STAFF WRITER represents the experienced team at HEREJacksonville.com, your go-to source for actionable local news and information in Jacksonville, Duval County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Jacksonville Jazz Festival, Riverside Arts Market, and World of Nations Celebration. Our coverage extends to key organizations like the Jacksonville Chamber of Commerce and JAXUSA Partnership, plus leading businesses in logistics, healthcare, and entertainment that power the local economy such as CSX Corporation, Baptist Health, and VyStar Credit Union. As part of the broader HERE network, including HEREOrlando.com, HEREStPetersburg.com, HERETallahassee.com, and HERETampa.com, we provide comprehensive, credible insights into Florida's dynamic landscape.
