Author Topic: Citizens Property Insurance starts plans for move out of downtown Jacksonville  (Read 4646 times)

thelakelander

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This would be a big negative economic blow to the Northbank. How the DIA and city leaders address post pandemic changes in the office market and that impact should be a key priority moving forward:

Quote
Citizens Property Insurance Corp., which is one of downtown Jacksonville's biggest employers, is considering a move to the Southside suburbs.

Citizens moved more than 1,000 employees into EverBank Center in 2015 in a major win for bringing more activity into downtown. The organization's time in the downtown office tower could end in 2026.


https://www.jacksonville.com/story/news/local/2024/08/08/citizens-property-insurance-corp-may-move-from-downtown-jacksonville/74682959007/
« Last Edit: August 09, 2024, 06:18:25 AM by thelakelander »
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UrbanistInExile

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Leaning into residential conversions seems like a logical next step. Not all buildings designed as modern office space lend themselves well to being redeveloped as residential, but where it can be realistic it should be considered.

jaxlongtimer

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This quote will make it hard for Downtown to compete...
Quote
"Citizens is seeking to negotiate with vendors for Jacksonville office space that provides greater access in bad local weather conditions and enhances its emergency response capabilities by housing equipment and other response assets at a single site," said Michael Peltier, spokesman for the agency. "Citizens is also seeking a more centralized location for its employees living in the Jacksonville area."

HD Supply just moved to the Avenues for some of the same reasons. 

A top reason Downtown is losing office workers is parking garages don't cut it anymore.  The lack of robust urban core and suburban mass transit is going to be to the continued detriment of Downtown.  Instead of giving tens of millions to developers, if the City channeled that money to infrastructure including mass transit, security, streetscapes and green spaces, Downtown would be a far different place than today.  Just plain stupid!
« Last Edit: August 09, 2024, 12:47:16 PM by jaxlongtimer »

Steve

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Leaning into residential conversions seems like a logical next step. Not all buildings designed as modern office space lend themselves well to being redeveloped as residential, but where it can be realistic it should be considered.

In particular, I feel like the EverBank building would be a REALLY tough conversion. The floor plates on this thing are super big - which normally would be nice for an office tenant competing with a wide, short suburban office building.

Joey Mackey

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Generally, does anyone know if large scale office space is cheaper on the Southside/TownCenter than in Downtown? Seems like demand is higher for the Southside, but there might also be more supply too.

CityLife

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Downtown Jax office seems to be struggling in general and it cannot all be blamed on the pandemic. For comparison, office rents have been rising in South Florida and many new office buildings are coming online. Stephen Ross's new buildings in WPB are leasing for 6-7x what buildings in DT Jax are leasing at. Totally different markets, but just demonstrating that office is not yet dead.

https://therealdeal.com/miami/2024/07/12/office-asking-rents-rose-across-south-florida-in-q2/

The following buildings are all leasing on Loop Net with very reasonable rates (Low to mid 20's per square foot):

225 Water Street has 250k square feet
301 West Bay (Southern Bell) 361k square feet
Old Prudential 389k square feet
815 South Main (Suddath) 105k square feet
Riverplace Tower 62k square feet
1200 Riverplace 86k square feet
200 West Forsyth 86k square feet
841 Prudential (Baptist) 53k square feet
501 Riverside (Everbank) 32k square feet
100 North Laura 38k square feet

There are many more small listings, but those are the bigger ones. Combined those buildings have 1.46 million square feet leasing or about 20% of Downtown's office space. That is more than 2 full Bank of America towers. When you add the smaller vacancies up, I'm sure it is closer to 30%, as CBRE said total downtown vacancy was 26% back in February.

Are DIA and the City in general too focused on residential and parks and not enough on office retention and relocation's?
« Last Edit: August 09, 2024, 03:13:26 PM by CityLife »

CityLife

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Generally, does anyone know if large scale office space is cheaper on the Southside/TownCenter than in Downtown? Seems like demand is higher for the Southside, but there might also be more supply too.

The leasing rates look similar, but the parking costs may differ.

Suddath is leasing at $19, 225 Water Street at $23, Old Southern Bell at $25-$27, Old Prudential at $23, old Stein Mart at $24.

Southside rates seem pretty similar with rates anywhere from $23-$25 looking like the norm for larger buildings.

marcuscnelson

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This quote will make it hard for Downtown to compete...
Quote
"Citizens is seeking to negotiate with vendors for Jacksonville office space that provides greater access in bad local weather conditions and enhances its emergency response capabilities by housing equipment and other response assets at a single site," said Michael Peltier, spokesman for the agency. "Citizens is also seeking a more centralized location for its employees living in the Jacksonville area."

HD Supply just moved to the Avenues for some of the same reasons. 

A top reason Downtown is losing office workers is parking garages don't cut it anymore.  The lack of robust urban core and suburban mass transit is going to be to the continued detriment of Downtown.  Instead of giving tens of millions to developers, if the City channeled that money to infrastructure including mass transit, security, streetscapes and green spaces, Downtown would be a far different place than today.  Just plain stupid!

Yeah, this suggests that they have already decided to leave Downtown and are just choosing which office park to settle in. Real shame.

Boyer has talked about office conversions being something to push for, but from a practicality standpoint that is primarily going to apply to older buildings, the size and shape of towers like the EverBank Center do not lend themselves well to that.

Downtown Jax office seems to be struggling in general and it cannot all be blamed on the pandemic. For comparison, office rents have been rising in South Florida and many new office buildings are coming online. Stephen Ross's new buildings in WPB are leasing for 6-7x what buildings in DT Jax are leasing at. Totally different markets, but just demonstrating that office is not yet dead.

Are DIA and the City in general too focused on residential and parks and not enough on office retention and relocation's?


We are not South Florida, that's obvious. The question then is what are we?

I think anyone here would agree that it is theoretically possible to leverage our assets as a region to create a desirability that can't be found in Miami or Orlando or Tampa to attract businesses with, but boy have we struggled to have our crap together enough to actually deliver that without falling prey to nonsense. But that's perhaps besides the point of Citizens leaving Downtown. To that end, we've had a number of cases of putting a great deal of incentives (both directly and indirectly via infrastructure investment) into helping businesses leave or stay away from Downtown. Dunn & Bradstreet comes to mind for me right now. We have to decide what our actual values are in terms of that.
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Charles Hunter

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Yeah, they aren't looking anywhere near Downtown.

The Citizens Insurance Invitation to Negotiate has a map of where they want to move. There is a link to the ITN in the article linked in one of the early posts. Since I can't figure out how to post a picture (actually a page of a PDF), here's a description of the target area:

JTB is the north boundary
FECRR is the western boundary
Kernan, extended south, is the eastern boundary
The southern boundary connects the east and west boundaries with a line just south of the I-95/SR9B interchange.

The boundary lines do not exactly follow the highways, perhaps giving some wiggle room in site selection.

marcuscnelson

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Here we are:

So, to the young people fighting in this movement for change, here is my charge: march in the streets, protest, run for school committee or city council or the state legislature. And win. - Ed Markey

Charles Hunter

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Thanks!!

Wait a minute, I never realized that a former Jaguars coach was popular enough to get a neighborhood named after him!!   ;)

thelakelander

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Leaning into residential conversions seems like a logical next step. Not all buildings designed as modern office space lend themselves well to being redeveloped as residential, but where it can be realistic it should be considered.

In particular, I feel like the EverBank building would be a REALLY tough conversion. The floor plates on this thing are super big - which normally would be nice for an office tenant competing with a wide, short suburban office building.

Those floor plates are perfect for..... self storage.... :o
"A man who views the world the same at 50 as he did at 20 has wasted 30 years of his life.” - Muhammad Ali

jaxlongtimer

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Leaning into residential conversions seems like a logical next step. Not all buildings designed as modern office space lend themselves well to being redeveloped as residential, but where it can be realistic it should be considered.

In particular, I feel like the EverBank building would be a REALLY tough conversion. The floor plates on this thing are super big - which normally would be nice for an office tenant competing with a wide, short suburban office building.

Those floor plates are perfect for..... self storage.... :o

Or truly Downtown Four Seasons  ;D.

Ken_FSU

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Downtown Jax office seems to be struggling in general and it cannot all be blamed on the pandemic.

It is somewhere between disingenuous, delusional, and completely asinine to try to put the blame on the pandemic for Jacksonville's downtown office vacancy situation in 2024. And it CERTAINLY isn't backed by much empirical data. Yes, COVID-19 hurt urban office occupancy. But in the four years since, we're getting crushed by just about everyone outside of San Francisco in terms of how our peers have reacted and how office occupancy has bounced back.

Irritates me to no end when the DIA puts the blame solely on changes resulting from WFH. Because it just ain't true. The reason employers have fled downtown (just like restaurant owners have) is because we've absolutely failed them in creating an attractive environment that they want to do business in, or bring clients into. It's a total cop-out when you see how well cities with better urban fabric have rebounded.
« Last Edit: August 12, 2024, 08:18:01 AM by Ken_FSU »

Jax_Developer

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Downtown Jax office seems to be struggling in general and it cannot all be blamed on the pandemic.

It is somewhere between disingenuous, delusional, and completely asinine to try to put the blame on the pandemic for Jacksonville's downtown office vacancy situation in 2024. And it CERTAINLY isn't backed by much empirical data. Yes, COVID-19 hurt urban office occupancy. But in the four years since, we're getting crushed by just about everyone outside of San Francisco in terms of how our peers have reacted and how office occupancy has bounced back.

Irritates me to no end when the DIA puts the blame solely on changes resulting from WFH. Because it just ain't true. The reason employers have fled downtown (just like restaurant owners have) is because we've absolutely failed them in creating an attractive environment that they want to do business in, or bring clients into. It's a total cop-out when you see how well cities with between urban fabric have rebounded.

Completely agree with you Ken. It is all about supply/demand at the end of the day. Downtown has 16M SF of office space, but the area that Marcus highlighted has close to, if not more than, 30M SF. All of that SF has been built since 1980 or so. The buildup of the Southside/Baymeadows market reflects the migration of wealth. Ponte Vedra, Saint Johns, Mandarin, Beaches... these areas are why the office core is now in the Southside/Baymeadows.

Lease rates may be similar but CAM fees are not. Parking is also an issue with some of the largest buildings DT.

I posted about this before, but got a lot of flak of course... our city made their decision 20+ years ago & today we are seeing the effects of those policies. We chose to create an office submarket that eclipses our downtown & no that isn't "common". Suburban office parks were literally invented in Jacksonville. Retail usually follows... cough cough St. Johns Town Center. SJTC has made the job DT a lot harder.

https://en.wikipedia.org/wiki/Midtown_Centre
« Last Edit: August 12, 2024, 07:13:10 AM by Jax_Developer »