Exploring Freedom Commerce Center

[Metro Jacksonville]

Exploring Freedom Commerce Center



Metro Jacksonville's Kara Holmes dives deep into the heart of Baymeadows, where investors have rediscovered a collection of forgotten possibilities.

Full Article
http://www.metrojacksonville.com/article/2013-nov-exploring-freedom-commerce-center

[cline]

We can talk about the nature preserve and land swaps and all that but this "husk of opportunity" was built in an extremely sensitive ecosystem and now sits with a ridiculous vacancy rate.  I guess we're just going to pave everything in the name of "progress".

[thelakelander]

I think the opportunity at this point is primarily filling the existing developed space.  The majority of the property is now conservation.

[mbstout]

Glad to see the wetlands were saved.
Side Q: What is the source of the map at the end of the article?
It's not Google or Apple Maps and I quite like it..

[thelakelander]

Cushman & Wakefield

http://www.cushwakelandfl.com/media/downloads/pdf/75/1346.pdf

[cline]

I think the opportunity at this point is primarily filling the existing developed space.  The majority of the property is now conservation.

I guess.  Looks to me like most of the opportunity is moving to the Gate Parkway/JTB area and leaving Baymeadows behind.  Although they do have the opportunity to get a newly renovated bikini bar almost across the street from FCC if the owners can push it through Council. Progress baby!

[thelakelander]

My guess is they'll pull from each other as time goes on....until most of the companies move on to Bartram Park and St. Johns County. .  This seems to be the case with the recent company that's leaving Gate Parkway area for more space at FCC. In the long run, adaptive reuse will become more popular.  This is already the case in the office park across the street.  It now features two colleges most wanted downtown and a charter school.  I wouldn't be surprised to see more residential infill.

[kbhanson3]

Nice summary of the history of Freedom Commerce. The challenge with FCC isn't the quality of the buildings or the infrastructure. A few of the buildings even have nice I-95 visibility. The challenge is its location. The Baymeadows/I-95 interchange is woefully inadequate for the volume of traffic that would be generated by FCC and Deerwood Center if those business parks were at healthy occupancy levels. When you couple the history of crime in the area (particularly the adjacent hotels), the cons of the location exceed the pros. Even so, Crocker is in at approx $35 per building SF after renovations. Add $25 per SF for tenant improvements, and the total investment is $60 per SF. At that number Crocker can undercut the market and do deals at low rents and still make a very nice return. Good for Crocker, but not good for the Jacksonville office market overall as that will add more pressure to market rates. Lower rental rates in the market lowers property values, which in turn lower property taxes. It's the kind of downward spiral that we have been experiencing for the past 5 years. We need job expansion in the city to begin climbing out.

[thelakelander]

^Sounds like we have a lot more office space than needed in our market.  What's the chances of finding new uses for much of the vacant space citywide?

[duvaldude08]

I worked their for about 6 years when I was with blue cross blue shield. Once bcbs finished their additional building at their gate parkway campus, FCC was toast. They occupied alot of space out there for decades. To lose a long time teanet was a huge blow.

[kbhanson3]

thelakelander, IMO best hope for reducing office vacancy is job growth not reuse.  Much of the vacancy is in larger buildings in declining submarkets (Arlington, Baymeadows and Downtown).  There's a big push to do something about Downtown's vacancy, but not the other submarkets.  Jacksonville has been an overbuilt market for all of my time in the business (since late '90s).  It's one of the unintended consequences of consolidation, which made greenfield development much more economical than infill or dense, high rise urban development.  When "healthy," the Jacksonville office market historically has been around an 88% occupancy rate.  In a 25 million SF market (more or less) that's 3.0-3.5 million SF of vacancy at any given time.  I suppose some of those buildings could be repurposed, but into what use?  And as soon as the market gets a little healthier, suburban development will return adding more space onto the market.  I'm afraid we're caught in a vicious circle.  And that's one reason why Jax doesn't have many institutional investors buying into the office sector.

[cline]

And as soon as the market gets a little healthier, suburban development will return adding more space onto the market.  I'm afraid we're caught in a vicious circle.  And that's one reason why Jax doesn't have many institutional investors buying into the office sector.

If our City Council would actually grow a pair and say no to developers or ask developers for certain concessions instead of bending over for them- we could get out of the "vicious cycle" and we could promote adaptive reuse rather than greenfield development.  It takes leadership to buck the trend.

[CityLife]

thelakelander, IMO best hope for reducing office vacancy is job growth not reuse.  Much of the vacancy is in larger buildings in declining submarkets (Arlington, Baymeadows and Downtown).  There's a big push to do something about Downtown's vacancy, but not the other submarkets.  Jacksonville has been an overbuilt market for all of my time in the business (since late '90s).  It's one of the unintended consequences of consolidation, which made greenfield development much more economical than infill or dense, high rise urban development.  When "healthy," the Jacksonville office market historically has been around an 88% occupancy rate.  In a 25 million SF market (more or less) that's 3.0-3.5 million SF of vacancy at any given time.  I suppose some of those buildings could be repurposed, but into what use?  And as soon as the market gets a little healthier, suburban development will return adding more space onto the market.  I'm afraid we're caught in a vicious circle.  And that's one reason why Jax doesn't have many institutional investors buying into the office sector.

Fantastic post. Think we have some of the same issues in the residential sector as well.

[kbhanson3]

It's easy to say that in a vacuum, but often the proposed developments are consistent with the comp plan.  So why should they be denied if they are consistent with the laws & regulations in place?  As a developer, I will say that I have yet to have government bend over backwards for any project that I've been involved in and there are almost always concessions made by the developer to get project approval.  In my experience the pendulum more often swings toward the other end of the spectrum out of concern for political backlash from constituents.  As for adaptive reuse projects, I'm looking for those opportunities constantly but finding one that is economically attractive to investors is very difficult in Jacksonville.  It takes property owners being willing to accept lower sales prices for their buildings to make that happen, and I'm not seeing a whole lot of that.

[cline]

^That's my point.  Our comp plan and land development regs are a joke.  They need to be overhauled but that is difficult when you have developers in the pockets and ears of our politicians- you're never going to get those regulations changed.  Look at the backlash from Sleiman et. al against the Mobility Plan.  The Mobility Plan would have promoted adaptive use and developing closer to the core.