As the Jacksonville industrial real estate market experiences historically high demand for space, experts say that Wayfair's decision to open a more than 1 million-square-foot warehouse at Cecil Commerce Center sends a signal to developers to get ready for more big boxes.
“As Amazon and Wayfair and others come to our market, it validates that we’re a strong logistics hub," said Guy Preston, an executive vice president at Colliers International Northeast Florida.
On Wednesday, a source told the Business Journal that Wayfair was poised to open a 1.2 million-square-foot facility at the site of "Project Jaguar."
In order for a big name company to open a warehouse, one of the top two factors the company considers is whether the city has a labor pool large enough to support it, Preston said. E-commerce companies in particular have high demands for labor, so a new Wayfair distribution center could give other companies a clue that Jacksonville can support their labor needs, he said.
However, when those companies do decide to come to Jacksonville, they might have some trouble finding space. In the past year, the industrial real estate vacancy rate has declined by 2.5 percentage points to 2.9 percent, the lowest rate for Jacksonville on record and far below the national average of about 5 percent, according to research from Cushman & Wakefield.
Experts say that developers also tend to take cue from a company like Wayfair entering a market.
But that doesn't necessarily mean Jacksonville will start seeing a slew of speculative development. No one in a market this size builds a 1 million-square-foot warehouse on a speculative basis, Preston said, but a big warehouse coming in at least tells developers they should start prepping land for when major tenants do come.
Prime Realty CEO Tyler Saldutti said one thing that could hold some developers back from breaking ground is the competition from Cecil Commerce Center, which is owned by the city. Companies looking for a lot of space would likely go where its easier to get incentives.
“Every new company that comes here gives the next company more confidence in coming here," Saldutti said. “If somebody needs 1 million square feet right now, Cecil Commerce Center is on the map.”