Industrial Market Overview

The history of Jacksonville shows the industrial growth along the corridors of trade in Northeast Florida. Industrial submarkets thus developed which now totals approximately 100 million square feet in five main submarkets which are the Northside, Westside, Downtown, Southside and Orange Park. The construction features, size and type of industrial properties have changed as these submarkets grew out and away from Downtown Jacksonville. Due to a healthy economy, continued positive job growth, excellent infrastructure, growing ports and relatively low land costs, Jacksonville is viewed globally as a city that is on the rise for users and industrial developers.

In January of 2009, Mitsui OSK Lines (MOL) opened its new terminal in Jacksonville. The first ship service berthed the afternoon of January 12, 2009. TraPac, a wholly owned subsidiary of MOL, operates the 158 acre terminal. Jacksonville was selected by MOL due to its fully developed railway, road network and major logistics and warehouse facilities in the surrounding area. MOL is currently shipping Asian products direct to Jacksonville servicing national and regional customers. It is estimated that MOL will double the container cargo presently being shipped to Jacksonville, from approximately 800,000 TEU’s to 1,600,000 TEU’s annually.

The signing of a lease with Hanjin Shipping Co. of South Korea marks JAXPORT’s ascent into the top tier of U.S. seaports. The next year will be spent designing and permitting the 90-acre, $300 million terminal. When fully operational, the Hanjin terminal will be able to handle at least 800,000 container units (measured in 20-foot equivalent units). Hanjin and the new TraPac terminal together will triple JAXPORT’s current container throughput, making JAXPORT a top-ten U.S. container port.

In late FY 2008, JAXPORT received federal approval of its application for expansion of the general purpose zone (FTZ #64). After the expansion, Johnson Development is the new operator of a 48-acre facility within West Lake Industrial Park. Other approved sites include acreage at Jacksonville International Airport, the International Tradeport and Imeson Industrial Park, as well as Blount Island and Talleyrand Marine Terminals. JAXPORT is now working on a zone reorganization plan to be submitted in the first quarter of 2009. This plan will allow JAXPORT to accommodate several new user site requests and more strategically position currently available FTZ land throughout Jacksonville for warehousing and distribution operations.

It is estimated that over the next decade, there could be 100,000 regional jobs stemmed from Jacksonville’s port growth. The economic impact of the deepwater system may jump from $3 billion to $6 billion as new terminals come online.

With the expansion of Jacksonville’s port, as well as the increase in port growth of Savannah, Miami and Charleston, Jacksonville could face a lack of industrial space for users in the future. Asian manufacturing products are now being delivered to East Coast cities rather than being shipped in via the West Coast and shipped across the United States by truck.

Due to this demand, our city has seen a tremendous amount of activity from regional, national and local developers and users looking to acquire strategic land positions to meet this anticipated growth. These groups are looking to acquire land that has excellent interstate accessibility and can serve as a premier park development.

The stability of the Northeast Florida industrial market can be attributed in part to the limited number of industrial developers and the careful planning and permitting process initiated by our region and state. Northeast has only 6 to 8 industrial developers as compared to other southeastern markets which may have as many as 30 to 35 industrial developers. The majority of the local industrial parks are controlled by individual developers who have the ability to stop building when the market softens. With this growth, a number of national and regional industrial developers are betting on Northeast Florida’s future, and acquiring land positions throughout the area.

This area’s permitting process has been very successful in regulating the amount of new development. While this process can be cumbersome, developers and end users are still very interested in acquiring land positions to benefit from Northeast Florida’s tremendous growth. Due to the limited supply of entitled and zoned industrial land and demand that has increased annually, industrial land prices have continued to increase and rental rates for new space has increased significantly.

As new space is absorbed in the market place, rental rates for bulk space should increase over the next decade, making Woodstock Industrial Park an ideal location for companies looking for a Southeast distribution location to service customers nationally.