Strong First Quarter Performance
The Jacksonville retail sector shined with vacancy stabilizing at 4.3%, making it the top-performing retail market in Florida. Increased retail activity can be attributed to Jacksonville’s consistent influx of new residents as its population recorded one of the greatest growth rates nationally. As such, Jacksonville accounted for more than 5% of retail demand across the country.
With demand for retail growing rapidly, the St. Johns County and Orange Park/Clay County submarkets note the most absorption activity. Throughout the past 12 months, the submarkets recorded 517,534 and 181,062 square feet in absorption, respectively. St. Johns County is particularly notable as population growth is the greatest here, and the area’s school system is attractive for residents.
Absorption activity is most notable for properties that are 30,000 square feet or below. This trend has been ongoing for the past 12 months and continued in the first quarter. The largest lease for Q1 2025 was in the Southside submarket, with Gordon Food Service taking up 30,000 square feet. The rest of the leases for this quarter were below 15,000 square feet and featured a variety of tenant types.
Tenants Aiding Jacksonville
Over the past 12 months, fitness properties, grocers, and discount retailers accounted for the most retail demand. Restaurants also became active with several opening their doors towards the end of 2024. Now, construction is focused on buildings smaller than 10,000 square feet in the Butler/Baymeadows, Southside, and St. Johns County submarkets. These new developments consist of convenience stores and quick service restaurants.
However, there are still several big-box opportunities making moves in Jacksonville. A new 108,000-square-foot Home Depot is in the works to take over a former Kmart, and two new Publix stores made up of 48,387 square feet are also on the way. Additionally, a few big-box stores recently opened across the metro. A 100,000-square-foot Bass Pro Shops finalized in November 2024, with Lowe’s and BJ’s Wholesale also boasting new locations greater than 100,000 square feet.
Sales Momentum
Together with increased demand, transactions in Jacksonville also recorded an uptick. Over the past 12 months, sales volume totaled $715 million with 390 sales. This sales activity was strongly made up of single-tenant, net-leased properties, which included some Walgreens and CVS locations. Additionally, private transactions accounted for more than half of deals, which is expected to continue moving forward.
Throughout the first quarter, Jacksonville recorded $296 million in sales. The most notable transaction occurred in January when Kimco Realty acquired The Markets in Town Center for $108 million. This shopping center is made up of 254,000 square feet and is anchored by a Sprouts. Several tenants also have leases set to expire in the next couple years, which made the center more attractive for the sale.
A standout sale in April also adds to Jacksonville’s strong start to 2025. Regency Square Mall, which totals 895,000 square feet, sold for $18.8 million at the beginning of April. The building will be redeveloped throughout the next five to 10 years to become new multifamily and retail space.
