The Jacksonville industrial market finished 2020 on a high note. A boost in ecommerce demand from the pandemic has supported strong leasing appetite, owner-user purchases and increasing rental rates.

Colliers International outlines the market dynamics in a new report. New construction, which represents about 1.9% of the current industrial stock, has created what the report calls a "trickle-up" effect where industrial users are shedding dated space for quality new construction product. The trend has produced a combination of rising industrial vacancy—which hit 5.4% in the fourth quarter—and rising rents—which increased to $5.21 per square foot.

While other asset classes are closely monitoring the vacancy rate—typically because a rising rate leads to tempered if not negative rent growth—Colliers says that increased vacancy is actually a welcome relief in the Jacksonville industrial market. In 2018, the local vacancy rate reach lows of 2%, giving users limited options. Today, the increased rate of 5.4% still points to healthy market conditions, and new construction activity is well matched to demand.