Gina Kline

Jacksonville’s retail market today is much stronger than one might think possible given we are still recovering from the pandemic. Leasing interest is strong, and tours are frequent. Unfortunately for those interested in purchasing or leasing a building, inventory is extremely limited. During the depths of the pandemic, most landlords elected to work with tenants, providing them the relief they needed to survive. Today, most of those tenants remain in place, operating under modified lease agreements. That said, tenant sales volumes have still not completely recovered, which means landlords do not have as much pricing power as they typically would in this tight of a market. Construction costs are also making it challenging for buildout intense uses to make sense of new locations. For this reason, second generation spaces – particularly restaurants – are in very high demand.

Despite some persistent challenges related to the pandemic, Jacksonville’s retail market is gaining momentum. Well capitalized operators are actively searching for new sites across nearly all categories including quick service restaurants, automotive, gas, and even boutique fitness among others.

While challenging for most of 2020, Jacksonville’s retail market is showing signs of life that bely the headline numbers. It is true that many retailers have failed as a result of shutdowns and vacancy is increasing rapidly. Today, headline vacancy stands at 5.2% - an increase of 50 bps since 1Q but far from alarmingly high. Market rent has been flat for most of the year and is showing signs of retracing some of this cycle’s gains.