Issue No. 01 | Q2 2026 | August 2026
Welcome to the first edition of my Jacksonville industrial market update. My goal with this letter is simple. Each
quarter I want to put the numbers, the port news, and the development activity that actually move your property
values in one place, in plain language, from someone who is in the field every day. If you own industrial space in
this market, this is meant to keep you a step ahead.
Here is where things stand.
The Market at a Glance
If you have only seen the headline vacancy number, I understand the concern. Jacksonville industrial vacancy sat
near 10.9 percent at the close of the second quarter, up from the low single digits we enjoyed a couple of years
ago. On its own, that number tells an incomplete story.
The fuller picture is more encouraging. Vacancy actually ticked down for the first time in several quarters, and the
market posted positive net absorption after a soft stretch, a swing of more than 800,000 square feet from the prior
quarter. Asking rents did not crack. They rose slightly quarter over quarter and are up more than 25 percent since
2023.
What we are living through is a supply digestion phase, not a demand collapse. Vacancy rose because developers
delivered a large wave of speculative space in 2025, much of it without tenants signed. Tenants did not leave. The
market simply must absorb what got built.
A few forces are shaping the outlook:
• The construction pipeline has effectively shut off. Space under construction is down more than 80 percent
from a year ago. That is the mechanism that clears an oversupply, and it is already in motion.
• The national cycle is turning. U.S. industrial vacancy fell last quarter for the first time since 2022, and
Jacksonville tends to follow the broader trend.
• Rates and trade policy are the wild cards. Financing costs and tariff uncertainty keep some occupiers cautious,
but they also slow new construction, which helps existing owners.
• Population growth remains a tailwind. Northeast Florida keeps adding people and consumers, and that
demand sits underneath all of it.
Why the Headline Does Not Apply to Most Small-Bay Owners
Here is the part the metro-wide average hides, and it matters if you own smaller product. The vacancy pain is
concentrated in two places: large speculative big-box buildings, generally 500,000 square feet and up, and the
Westside submarket where much of that spec product landed.
Small-bay and infill space is a different market entirely. Nationally, space under 150,000 square feet is
commanding roughly a 21 percent rent premium over bulk product, and the sub 50,000 square foot segment has
accounted for the large majority of leasing activity. Shallow-bay availability stays tight because almost nobody
builds it on spec.
A good example closed here recently. An eight-building, 230,000 square foot small-bay park on the Northside
traded fully leased with more than 50 tenants in place, spaces ranging from about 2,250 to 10,000 square feet.
That is the infill story in a single transaction. If you own well-located small-bay, flex, or yard-dependent property,
your fundamentals are stronger than the headline vacancy rate suggests.
Port Update
JAXPORT continues to invest heavily, and that matters to every industrial owner here because port throughput
drives warehouse, distribution, and drayage demand downstream.
The headline is a 250-million-dollar modernization of Blount Island. The new SSA container terminal is complete,
which sharply increased container capacity and moves the port toward roughly 2 million TEU of annual throughput.
Three new ship-to-shore cranes have come online across Blount Island and Talleyrand. A project to raise the harbor
power lines, which lets larger and taller ships call the port, is targeted for completion by the end of this year. The
new Southeast Toyota auto processing complex has also wrapped.
The read for owners is straightforward. A bigger, more capable port strengthens the long-term case for
Jacksonville as a logistics hub and supports tenant demand, especially in North Jacksonville and the port-adjacent
corridors.
Logistics and Tenant Momentum
Occupiers are still choosing Jacksonville, which is the demand signal that matters most. A few recent
commitments:
• Aldi is taking a large distribution center on West Beaver Street, targeted to open in 2027.
• DHL Supply Chain announced a new North Jacksonville logistics and distribution facility.
• Amazon Air signed for air cargo space at Jacksonville International Airport.
• Johnson & Johnson Vision Care is building a packaging and distribution facility at its Southside campus.
• Axionlog is roughly doubling its North Jacksonville cold and dry storage warehouse.
Notice the mix. National logistics names, a cold storage expansion, and a specialized manufacturer. That breadth
of demand is healthy, and it is the kind of activity that eventually pulls through to the smaller supplier, service, and
third-party logistics tenants who need the space many of you own.
New Construction
For existing owners, the most important construction story is what is not getting built. The speculative wave has
essentially stopped, and that is good news for your occupancy and your rents.
The large, planned projects worth tracking are mostly big-box and mostly a 2027-and-beyond story. Suddath is
developing a roughly 3 million square foot industrial park near the airport, anchored by its NXTPoint Logistics subsidiary.
Hazel Street Industrial has a warehouse center underway at Pritchard Park on the Westside. Atlanta-
based Rooker is advancing a 650,000 square foot warehouse near the airport.
The takeaway: new supply is coming, but it is large-format and it is not immediate. Owners of in-fill and small-bay
product are largely insulated from it.
My Take
My honest read is that Jacksonville industrial is mid-cycle in a correction, with a full recovery likely to still be two to
three years out. That said, the inflection has started. Vacancy is turning, absorption is back in positive territory, the
pipeline is shut off, and the port keeps getting stronger.
If you own well-located infill or small-bay space, you are in a better position than the market headlines imply, and I
would not make a fear-based decision on that kind of asset right now. If you are weighing whether to sell or hold,
the honest answer depends on your specific property, your timing, and your goals, and I am glad to walk through it
with you.
If you would like a broker opinion of value on your property, or you just want to talk through where your asset
fits in this market, reach out any time. That is what I am here for. Let’s #MakeJaxHappen.
Tyler Steiner
Industrial Broker | Prime Realty Inc.
904.521.0057 | tsteiner@primerealtyinc.com