Duke-Weeks is leaving the Jacksonville area to focus on its three largest Florida markets--Orlando, Tampa and South Florida. The REIT feels the North Florida market is too restricted to create a steady demand for the company's ongoing projects, according to Duke-Weeks vice president Forrest Robinson. In a published statement, Robinson, who is based in Tampa, calls Jacksonville "a great and growing city but not large enough to capitalize on the Duke-Weeks delivery system."
In Orlando, the company is building a 61,000-sf industrial structure that is 100% pre-leased for 15 years to Chase Manhattan Bank. Duke-Weeks will also be breaking ground next year on a 450,000-sf suburban office campus for Chase in Tampa, FL, 80 miles west of Downtown Orlando.
The REIT's decision in Jacksonville dovetails with the company's October announcement to build an additional 3.3 million sf of new developments valued at $137 million in the Southeast and Midwest. The company expects an 11.3% return on those properties.
Besides the Jacksonville portfolio, Duke-Weeks is also selling $600 million worth of other properties and undeveloped land across the country. The proceeds will be used to fund upcoming development projects. The divestiture strategy evolved last year after the company realized it could make a 20% to 25% short-term return on properties it builds and later sells for a profit.
The company owns 104 million sf of office, industrial and retail assets. The REIT also owns or controls 4,000 acres that can support 60 million sf of future development.
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