IRR-Jacksonville Mid-Year Viewpoint 2015 Local Market Report - Retail
The Jacksonville retail market remained relatively stable during 2014 with rents and occupancy within neighborhood retail centers holding level, with some light to moderate increases in rents and occupancies in the larger community centers due largely in part to the reclassification of 2.3 million square feet from regional mall to community center inventory during the 2nd half of 2014. The Southside retail district, which is anchored by the highly successful St. Johns Town Center is Jacksonville's largest and most active retail district. Many national retailers and restaurants are present at the Town Center with rents averaging well over $30 PSF.
Nordstrom opened a 124,000 square foot store at the Town Center in October 2014 and more recently, Preferred Growth Properties, a subsidiary of Books-A-Million recently contracted to purchase 60 acres of land immediately north of the Town Center for mixed-use development to include 500,000 SF of retail development. The Beaches retail district is popular with the younger demographics and achieves the highest rents in Jacksonville. Wal-Mart Neighborhood Markets have backfilled four former Food Lion grocery stores since June 2013 within the Jacksonville MSA. Most recently, a 49,870 square foot center known as the Shoppes on Riverside opened during the first quarter 2015 on infill site within the Urban Core area. The center is anchored by a Fresh Market and is being developed alongside three multi-family projects to be known as Riverside Park (310 units), The Brooklyn at Riverside (310 units) and 220 Riverside (294 units), all of which should substantially boost Jacksonville's downtown.
New development in the suburbs are scattered amongst several non-anchored centers. Predominate national retailers include expanding within the Jacksonville MSA include Wal-Mart, Baskin & Robbins, Jerseys Mikes, Dunkin Donuts, Family Dollar and Dollar General. Residential construction has been rebounding within the Jacksonville MSA over the past two years, particularly in Northern St. Johns County, which should increase the demand for additional retail space over the next several years. Demand could be tempered by the increase in on-line shoppers, especially within the younger demographic. Sales activity has been steady within the Jacksonville MSA with well anchored centers having substantial remaining lease term trading for cap rates in the low 8% range and single tenant credit stores selling at sub 7.5% cap rates. In conclusion, we project increased construction activity and rent levels over the next 3-5 years, particularly along the US Highway 1 corridor in northern St. Johns County.
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IRR Mid-Year Viewpoint 2015 comprises a National Overview report and 300+ two-page Local Market Reports for all key property types as well as additional resources, including metrics methodology, graphs, and tables; these free reports may be downloaded from IRR’s site here.