Office Vacancy Rates Hold Steady at 22% in Jacksonville Amid Shifting Tenant Preferences

Office Vacancy Rates Remain High in Jacksonville

Jacksonville is facing ongoing challenges in its office real estate sector, with vacancy rates holding steady at approximately 22% throughout 2024, as revealed in recent reports from Cushman & Wakefield. The city’s office market is described as “generally stagnant,” particularly in the central business district (CBD), where demand remains low despite the availability of larger office spaces.

Market Trends and Tenant Preferences

3,000 and 5,000 square feet. This trend indicates a move away from traditional leasing arrangements involving entire floors. Furthermore, with 225,000 square feet of office space in downtown Jacksonville still uncertain in terms of occupancy, it is apparent that a need for change is becoming increasingly urgent.

Significant Recent Sales

1 Independent Square, a prominent skyscraper in Jacksonville’s skyline. This property changed hands in April for a total of $46.4 million. The building, along with two parking garages, was acquired by a company based in New York City, led by the CEO of Argentic Investment Management LLC. This tower, which spans 650,000 square feet, was previously sold a decade ago for $75.3 million.

Other Notable Office Transactions

Midway Park, a three-building office campus that sold for $27 million in August. The new owners from Fort Lauderdale-based SunCap Real Estate Investments intend to further develop the property. Despite the 85% vacancy rate, the property has seen an appreciation in value since its last sale in 2018 when it went for $10.1 million.

Dream Finders Homes, a local homebuilder, purchased the Prominence Office Park on June 28 for $22 million. Spanning 68 acres with a total of 759,000 square feet, the property is being eyed for potential mixed-use development. Plans may include residential units alongside existing office spaces.

Greystone at Town Center, comprising five buildings, sold for $19.2 million. The property is situated in the well-performing Deerwood Park area, which currently has a vacancy rate of 19.2%. These sales exemplify the changing landscape of Jacksonville’s office market, with opportunities for redevelopment and adaptability in mind.

Future Considerations