In third quarter, the availability rate for office space in Jacksonville ticked up from 10.7 percent to approximately 11.1 percent, according to Colliers International. While this marks the most pronounced step backward for the Jacksonville office market since mid-2016, it is important to note that the availability rate is still lower than pre-recession levels.

Market rent continues to climb, reaching nearly $21 per square-foot in our latest survey. This represents a 1.5 percent increase versus the second quarter of 2019, and a 5.7 percent increase versus the third quarter of 2018. Peak to trough, the movement in office rents has been impressive moving steadily up from the $16.25 range starting in late 2013.

On the capital markets front, Jacksonville continues to see activity. The Wells Fargo tower remains on the market with a select group of buyers competing for the award. Town Center One, Town Center Two, Deutsche Bank, and Butler Plaza are all on the market. The McKesson building just traded hands from Hines to Real Capital Solutions for $350 per square foot ($42 million) — a high water mark for Jacksonville by a long shot. Lastly, Capital Plaza in Deerwood Park was sold to Somerset Properties for $123 per square foot.

Moving into the fourth quarter, Colliers International expects to see continued growth in market rents — albeit at a slightly slower pace due to the softening macroeconomic picture. Availability rate should remain roughly flat. The company also expects to see additional activity in the capital markets as buyers and owners continue to leverage low interest rates and record-high pricing to access additional debt or sell property outright.