JACKSONVILLE, Fla. – When John Mizell walks his dog downtown, he says there isn’t much to see.
“It’s missing stores,” he said.
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He remembers better days in the 1950s and ’60s.
“Everything was there, all your stores. All your clothing stores all your grocery stores. You came downtown, it was a big trip. We had six movie theaters down here,” said Mizell as his face lit up at the thought of better days.
Despite the void that is seen and felt in downtown Jacksonville, things downtown are beginning to change.
There’s development happening all over downtown and nearby.
The soon-to-be brand-new Jaguars stadium, Florida Theatre renovations, a new Museum of Science and History is coming, Pearl Square is being developed, Lift Every Voice and Sing Park is complete and the Emerald Trail is underway. Plus more apartments and homes are being built.
But where are the people? Not in downtown offices, according to a new report.
More than a quarter of the available office space in downtown Jacksonville was vacant at the end of last year.
And vacancies are on the rise in the heart of Jacksonville, according to Downtown Vision, Inc.’s (DVI) 2024 State of Downtown Report, which was released last week.
As of the end of 2023, there was more than 7.9 million total square feet of office space downtown, and 26.1% was vacant. That’s much higher than the vacancy rates of other big Florida cities where the lease prices are more expensive like Miami (Brickell) 11.8%, Miami (Downtown) 17.6%, Tampa (14.5%), St. Petersburg (12.4%) and Orlando (11.8%).
Lori Boyer, CEO of the Downtown Investment Authority spoke with News4JAX about the vacancies.
“Well that number is high and obviously we are not pleased to have that number but it’s not a surprise,” Boyer said.
Global Commercial Real Estate Services said the trend is largely driven by concerns over interest rates, construction costs, and the shift to hybrid work schedules, which have slowed companies’ decision-making processes.
Some companies have mandatory office work hours and some are still hybrid.
The report says 52.7% are in the office with no remote work, 13% are hybrid, and 28.3% are hybrid flex.
The world had to adjust to working from home and many people liked it. Now there’s a challenge of getting people back into the office.
Now the city is looking for ways to reduce the vacancy number.
“We look at it from many approaches, very specifically the Downtown Investment Authority has incentives to encourage new leases of space in office buildings,” Boyer said.
Jake Gordon, CEO of DVI, said he sees the issue as an opportunity for innovation.
“Office space may need to be reimagined,” he said, pointing to the growing trend of converting office buildings into residential spaces.
Gordon also stressed the importance of diversifying downtown’s economic reliance beyond office workers to include tourism and cultural activities.
Despite the vacancies, the report notes that nearly 400,000 square feet of new office space is planned in developments such as RiversEdge, The Shipyards, and Union Terminal Warehouse. The report says that downtown’s office market is “is poised to bounce back.”
According to the report, there are nearly 9,000 businesses and more than 97,000 employees within three miles of downtown.
Boyer explained the Downtown Investment Authority (DIA) has an Incentive Program to assist with tenant buildout called the Commercial Revitalization Program, and JAX USA is always recruiting new businesses to move to the region, including downtown. But, investment in infrastructure such as the destination parks and in making streets more walkable and incentivizing more restaurants is also aimed at making downtown a more desirable place to come to work- to help building owners fill their vacant office space.
Boyer added that the conversion of office space to residential is possible too. That option would help with the need for more housing as well.
There are Fortune 500 companies and other major employers in downtown Jacksonville.
Wells Fargo and Riverplace Tower are almost fully occupied and others like One Enterprise Center have a significant amount of vacant space. Others are in between.
Mizell is hopeful that downtown will have a comeback, he’s likely living in the middle of it with new buildings developing around him. In the next couple of years, downtown will have more to offer. The hope is that it will attract even more people back downtown.
Projects under construction amount to $2.24 billion, with an additional $3.46 billion under review.