Florida is ranked among the top five states in terms of commercial real estate development in 2016, and Jacksonville is reflecting the state trend, according to a new study by the National Association of Industrial and Office Parks for the Commercial Real Estate Development Association.
Overall, Florida ranked fifth among the 50 states in development and construction of commercial property in 2016. More specifically, the Sunshine State ranked third in both warehouse and retail development and seventh in office real estate development.
In total, there was $7.59 billion spent on commercial real estate development in Florida in 2016. Florida had the same ranking as 2015.
New York was ranked the highest state on the list with $24.8 billion spent on commercial real estate development in 2016.
“Florida is in the top states for commercial real estate development, supporting 134,152 related jobs and contributing $15.75 billion to the state’s economy,” a prepared statement said.
On the First Coast, commercial real estate development is reflecting the state trend. The study did not have regional data for different parts of the state. But local analysts are pleased.
“I don’t know if we’re up as high as the state, but we’re up,” said Scott Nyman, chairman of the Commercial Alliance of Realtors for the Northeast Florida Association of Realtors.
Commercial development real estate sales for Jacksonville were up 2.5 percent, industrial development was up 2.8 percent and office was up .8 percent over 2015, Nyman said.
Commercial real estate was slow to feel the downward slump at the beginning of the Great Recession a decade ago and, therefore, it was slower to bounce back. Recent trends show even commercial real estate is robustly bouncing back and that’s good for the economy, Nyman said.
“Commercial lagged behind the downward turn. Now, we’re showing it’s coming through the Great Recession as the residential real estate did. It’s a very positive,” he said.
“I think it’s further evidence that businesses have that demand and employment is starting to show more demand. Just in the business cycle as a whole this shows that busienss owners are expanding or whatever and they’re starting to take on more space.”
The local figures also show Jacksonville is now starting to catch up with other larger metropolitan areas of Florida that have long outpaced this area in commercial real estate growth, Nyman said.
“This town is growing up a little bit. I’ve been here for eight years. If you look at the state, you’ve got South Florida, Tampa and Orlando. And then Jacksonville’s been considered the sleepy city. It’s not that way anymore,” said Nyman, a co-owner of Summit Realty Partners in Jacksonville.
While 2016 was encouraging for real estate development in Jacksonville, Nyman said 2017 is likely to be better.
“There are other huge commercial real estate developments still to come to town,” Nyman said.
Nyman said this year promises a big influx of Jacksonville commercial real estate development. He said examples of the pending boom include the IKEA store that is under development off Gate Parkway; the St. Johns Town Center is already adding new tracts of commercial property; and the Amazon online retail distribution and delivery centers near the Jacksonville International Airport are about to add huge swaths to the inventory of commercial real estate.
The national study used U.S. Census data and other statistics from analysts to compile the rankings. NAIOP has been conducting the studies since 2008.
Nationally, commercial real estate development had 410 million square feet of construction in 2016 with a value of $86.9 billion, the study stated.
The study also found $1.41 trillion in expenditures on commercial real estate development across America in 2016 with an estimated $3.74 trillion impact on the gross domestic product.
“The total contribution to the U.S. GDP from the four phases of [commercial] development tracked in this study is substantial,” the study concluded.
