Stability marks Jax office market

JACKSONVILLE - Although there appears to be some indication of more leasing activity occurring within the Jacksonville office market this quarter, the overall market numbers show relative stability over last quarter.

“Leasing activity has increased in volume this quarter, but decisions are taking longer to be made,” said Lou Nutter, senior vice president of CB Richard Ellis

A stabilized market is illustrated in that the rate of vacant office space decreased only slightly over the last quarter of 2008 from 19.44% to 19.39% in the first quarter of the new year. Vacant sublease space this quarter remained relatively constant over fourth quarter figures from 4.3% to 4.4% of total vacancy.

Asking lease rates for available office space experienced an increase over previous quarters. The full-service gross average asking lease rate increased from $18.52 psf in the fourth quarter of 2008 to $18.72 psf currently.

Full service gross Class A space is currently available at an asking lease rate of approximately $21.32 psf compared to $17.42 for Class B space.

Available Class A office space in the suburbs is currently at an average asking lease rate of $21.57 psf compared to $21.03 for downtown Class A office space.

Class A direct vacant space is approximately 1,706,000sf this quarter or 15% of the total market’s rentable area. Class B direct vacant space is approximately 1,983,326sf or 23% of the total market’s rentable area.

Downtown vacant sublease space remained at approximately 18,000sf this quarter. By comparison, suburban vacant sublease space increased from approximately 183,000sf in the last quarter of 2008 to 192,000sf this quarter.

Absorption

The Jacksonville office market experienced negative net absorption in first quarter 2009. Total net absorption is approximately -12,959sf. The I-95/9A Corridor posted 27,396sf of positive net absorption this quarter.

Construction

No construction of significant office space is currently under way in the Jacksonville market, and there were no construction completions recorded for this quarter.