While the residential market grew, lease rates for commercial office space were flat.
Downtown Jacksonville’s residential and commercial office development grew steadily in the last 18 months and before the impact of COVID-19, according to Downtown Vision Inc.’s annual report released Aug. 11.
Downtown’s average office lease rate continues to trend lower than Florida’s three other largest central business districts.
DVI included a disclaimer with the report that the data was gathered before the impact of the pandemic.
“Pre-pandemic, Downtown Jacksonville was growing rapidly,” DVI CEO Jake Gordon said in a news release. “Despite the severe impact on many businesses, major construction continues and the stimulus support is helping. The public and private sector(s) are pulling together to keep Downtown growing,” Gordon said.
Gordon and Downtown Investment Authority CEO Lori Boyer previewed report excerpts Aug. 6 at a JAX Chamber ImpactJAX Public Policy Committee virtual State of the Downtown forum.
The report is a snapshot of Downtown’s economic landscape from January 2019 to June 2020.
Downtown’s 7.46 million square feet of commercial office space had a 14.2% vacancy rate in the first quarter of 2020, according to information provided for the report by real estate firm CBRE Inc.
The percentage of unleased Downtown office space fell from 14.8% in the 2018-19 report but is higher than the 8.3% rate in Orlando and 7% in Tampa.
Jacksonville still leads Downtown and Brickell Miami, with office vacancy of 15.9%.
DVI touted $93 million in major commercial sales in the 18-month snapshot and 462,000 square feet of planned office development.
This includes Fidelity National Information Services Inc.’s $145 million, 12-story, 376,414-square-foot world headquarters under construction in Brooklyn and JEA’s 162,000 square foot corporate office tower planned at 337 W. Adams St.
DVI’s report shows $530 million in Downtown development projects completed in the 18-month period.
DVI said $2.9 billion in projects are under construction and there is $3.1 billion in proposed projects. DVI’s 2018-19 State of the Downtown report showed $215 million in Downtown investment.
The Daily Record reported Aug. 6 that CBRE and DVI determined 6,137 residents are living in Downtown’s Northbank and Southbank, up 18% from last year.
The number of residential units Downtown was up 20% to 3,851. DVI says those units have an average 94% occupancy rate.
DVI’s report shows Downtown’s average residential lease rate from January 2019 to June 2020 remained nearly flat at $21.59 per square foot.
That price is fourth in the report’s list of major central business districts. Rates are $44.72 per square foot in Miami; $29.46 in Tampa; and $28.47 in Orlando.
”And as we recover, the more successful our Downtown is, the more competitive we are as a city, the more talent and jobs we recruit, the more our city thrives, and our tax base grows to fund even more improvements all our residents deserve,” Gordon said in the news release.
DVI calculates 4,000 residential units are proposed for Downtown using data from Zillow.com and the Duval County Property Appraiser.
This figure includes projects seeking development capital like the 950 units in the $600 million, mixed-use The District on the Southbank and 1,362 units in Jacksonville Jaguars owner Shad Khan’s Lot J and Shipyards development near TIAA Bank Field on the Northbank.
Khan’s development team is negotiating a $233 million taxpayer-backed incentive deal with the city for Lot J.
The full report lays out demographics on the education level, age range and buyer preferences of Downtown residents.
Renters make up 82.7% of Downtown’s residential market, compared with 17.3% of units that are owner-occupied.
Vestcor Companies subsidiary VC LaVilla Townhomes Ltd. plans to add 88 for-sale townhome units at Adams, Johnson, Lee and Forsyth streets in LaVilla at $250,000.
More than 50% of downtown residents are 25 to 54 years old, with 25- to 34-year-olds making up the largest demographic at 22.9%. DVI reports that 72.9% of Downtown households are nonfamily, which means the unit is occupied by one person or by people who are not related.
DVI said 56.7% of Downtown residents are college-educated.
Gordon said Aug. 6 that the pandemic has had a severe impact on Downtown retail business, at least in the short term. Foot traffic from daily visitors fell as much as 62% during the pandemic, according to DVI.
DVI partnered with Regency Centers Corp. to use cellphone activity data Downtown to calculate the drop. Gordon said companies use similar software to track foot traffic in shopping centers.
From March 14 through July 31, Downtown had 21,641 daily average visitors, Gordon said. The data was not included in DVI’s annual report.
Before Mayor Lenny Curry issued his COVID-19 emergency declaration March 13, Downtown had 56,199 daily visitors on average. Gordon said the data did not count people who work Downtown.
“While the recovery timeline from COVID-19 is unknown, trends across the board are in Downtown’s favor,” Downtown Vision Board Chair Numa Saisselin said in the news release.
“And as the premier center for the arts, entertainment, business and urban living in the region, a better Downtown means a better quality of life for all of us,” said Saisselin, president of Florida Theatre Performing Arts Center Inc.
For the full report, visit downtownjacksonville.org/research