Photo: Ryan Ketterman
Commercial Real Estate Roundup
Jacksonville's commercial real estate market
»Jacksonville’s Southside office market is the city’s best-performing area.
» Office activity has increased but is slower than in other sectors, with most of the activity coming from in-market relocations and absorptionof sublease space.
» In retail, the vibrant area also is on the Southside at Simon Property Group’s St. Johns Town Center and the adjacent Markets at Town Center, which Houston-based REIT Hines Global bought this year for $135 million. Nordstrom comes to the Town Center site in 2014 while Nordstrom Rack is opening at The Markets.
» As in the rest of Florida, any development occurring is for tenants who have preleased. Major speculative construction isn’t evident.
» Land sales are doing well at in-fill sites.
» Multifamily is strong.
» Jacksonville, less vibrant than south Florida but less prone to peaks and valleys, offers superior projected returns on expected incomecompared to those in south Florida, which are attractive to investors, says Craig Thomas, senior associate with Marcus & Millichap.
» “The activity here is picking up, but with office in particular, it’s not white hot by any means,” Thomas says. But, he adds, “We’ve got some pretty darn good transaction velocityin the market. In the not-too-distant past, that wasn’t the case.”
» Orlando’s Parkway Properties is the latest to see opportunity in Florida East Coast Industries’ move to monetize its mature real estate projects to invest in other, higher-yielding endeavors, such as logistics and All Aboard Florida, its Miami-Orlando passenger train. Parkway paid $130 million for FECI Flagler Development’s 1-million-sq.-ft. Deerwood office portfolio on the Southside.
Throughout Florida, charter schools have been ready takers of vacant retail space. Industrial space doesn’t convert into school rooms easily. But in Jacksonville, non-profit Compass Rose Foundation in May paid $5.2 million for a 168,000-sq.-ft. former Mercedes-Benz USA vehicle processing center on I-95. CBRE First Vice President Bruce Jackson (above), who arranged the purchase for Compass Rose, says the foundation plans to turn the warehouse into a school for training workers in automotive and diesel technology, equipment repair, commercial driver training and other fields.
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