Retail Standing Strong in Jacksonville
“On the single-tenant net leased side, quick-service restaurants and full-service restaurants were by far the most sought after asset types.”
JACKSONVILLE, FL—Significant population growth continues to propel the retail market in this region. The growth has encouraged the start of several new, large-scale, mixed-use developments in Duval, St. Johns and Nassau Counties, and enticed new brands and retailers to enter the marketplace, Ernie Saltmarsh, a senior associate with Colliers International in Jacksonville, tells GlobeSt.com.
“As the largest city in the contiguous United States based on total land size, Jacksonville has plenty of room for new development, which has taken place at a healthy rate over the last few years,” he says. “Supply has kept up with demand and resulted in strong, yet stable, rents for landlords. The St. Johns Town Center remains the epicenter for retail for the region, however new developments are under construction that will be similar in terms of quality and tenancy.”
Saltmarsh points to the nearly $560 million invested in retail assets during 2019, a 64% increase in sales from the year prior, as evidence of investor interest. Of the $560 million, about $304 million was spent acquiring shopping centers and $256 million on single-tenant net lease assets, he says. “On the single-tenant net leased side, quick-service restaurants and full-service restaurants were by far the most sought after asset types, accounting for 32% and 18% of total sales volume, respectively.”
Colliers recently closed the sale of Mandarin Central, a 63,346-square-foot shopping center located at 11018 Old Saint Augustine Road in Jacksonville. Milestone Properties, Inc. of Delray Beach, FL sold the asset to Mandarin Central Plaza, LLC for an undisclosed price, but the property was originally listed for $9,950,000.
Constructed in 1985 on seven acres, Mandarin Central was 94% leased at the time of sale to a mix of restaurants and service-oriented tenants including: Dollar General, Pizza Hut and Salento Steakhouse.
Saltmarsh predicts the rest of 2020 won’t be markedly different from 2019.
“There remains significant interest from investors seeking quality, desirably located, anchored shopping centers, and demand by private investors for single-tenant net leased assets is at an all-time high,” he says.
“As owners continue to reevaluate their portfolios for the long run, it creates opportunities for others, including 1031 Exchange buyers who are flocking to Florida and other income tax-free states to maximize their return. In terms of the coronavirus and its effect on the market, it is too early to predict the impact it will have locally. It will not likely have a major impact on investment sales, however it does appear that it will affect some retailers more than others.”