Jacksonville’s hot industrial market cooled in the first quarter of 2025 as prospective tenants worked the impact of prospective tariffs and other uncertainty into their plans.
Six real estate companies produced quarterly market reports that found the area’s vacancy rate among industrial and warehouse buildings averaged 6.67% while rents averaged $8.90 per square foot.
The average vacancy rate was similar to that at year-end 2024, 6.68%, while the average rent was down from $9.23.
The companies found first-quarter vacancy rates from 5.4% to 9.7%, a variation from differing methods of measurement, and rents from $7.84 to $10.84.
CBRE, Colliers, Cushman & Wakefield, Foundry Commercial, JLL and NAI Hallmark report quarterly on area market statistics.
“Post-election optimism was tempered by renewed discussions about tariffs, creating uncertainty and delaying leasing decisions,” reported Colliers.
It found that lease-up for completed buildings had been eight months in 2023-24 and now is up to a year for some recently delivered and under-construction projects.
Foundry Commercial reported that election uncertainty “evolved into tariff turmoil that continues to confound end users and investors alike.”
At the same time, Colliers found that “the imposition of tariffs has led some businesses to repatriate operations, while others are delaying decisions due to cost uncertainties.”
“Jacksonville’s appeal to developers is rooted in the extended wait times and limited rail access at the Port of Savannah, coupled with the availability of land primed for development,” it wrote.
Colliers reports that a shift in port-related activity is emerging, “with companies prioritizing proximity to the port.”
“Even with lower container volume needs, they are relocating from pricier Northeast and Southern regions, particularly to the Northside submarket” in Jacksonville.
Jacksonville’s location along the ocean and river, along with the interstate highway system and rail network, continue to attract business.
“While shifting international trade policies and tariff concerns have led some multinational corporations to delay decisions, local and regional businesses continue to drive demand,” wrote Camden Padgett, senior associate with NAI Hallmark Partners.
He noted that the small-bay segment is active, meaning that tenants needing smaller spaces are in the market, such as those that use up to 25,000 square feet of space.
“With our strategic location, strong infrastructure, and pro-business environment, Jacksonville remains well positioned despite global uncertainties,” Padgett wrote.
The interstate and rail system, particularly in West Jacksonville, and the JaxPort terminals in North Jacksonville are primary influences.
The parts of town with the largest industrial markets are the Westside, with 53.2 million to 64 million square feet of space, and North Jacksonville, with 32.7 million to 46.9 million square feet, depending on how the companies categorize space.
Cushman & Wakefield found that new leasing activity dropped year-over-year in the first quarter, but was up from the previous quarter, despite uncertainty.
It reported that the Westside and Northside submarkets led transaction activity, accounting for about 79% of the total volume.
CBRE reported there are obstacles facing the industrial market this year, including the tariffs as well as effects of higher interest rates over a longer duration than anticipated.
“These short-term obstacles will have a significant impact on how landlords and tenants respond in 2025,” CBRE wrote.
CBRE found that leasing activity significantly decreased in the first quarter. It said there were 42 leases totaling 1.2 million square feet of space in the first quarter of 2025, down from 65 leases at 1.58 million square feet in the first quarter of 2024. It found the average lease size was for 27,816 square feet of space.
CBRE also noted that consumer sentiment has declined, although more so than actual spending.
Colliers found that 1 million square feet of space was completed in the first quarter with another 5.1 million square feet under construction.
“While activity is currently limited, inquiries continue,” it wrote.
The firms cited bright spots:
• The development pipeline has 6 million square feet of space for delivery this year.
• More than 8 million square feet of space is in demand.
• Developers new to the market continue to shop for land.
“The market has the potential to finish the year strong,” Foundry Commercial wrote.
“Jacksonville’s strong local economy coupled with Florida’s population growth position the industrial market for a strong 2025.”
Logistics industries account for at least one of every six nonfarm and nongovernment jobs in Baker, Clay, Duval, Nassau and St. Johns counties as of April, the latest month for which statistics are available.
The 120,200 jobs directly related to manufacturing; wholesale trade; and transportation, warehousing and utilities represent 16% of the 731,400 private jobs in Baker, Clay, Duval, Nassau and St. Johns counties, the area’s metropolitan statistical area.
The Florida Department of Commerce released the latest statistics May 16.
While the numbers are slightly down from March and over the year, they fluctuate monthly.
Employment in those industries do not necessarily include the number of construction, education, financial, management, legal and professional jobs that might support or be associated with the logistics industry.