Emerging Industrial Markets: Florida Panhandle
April 12, 2022
DemographicsMore than 1.7 million people live within 100 miles of the Florida Panhandle region, with a projected growth rate of 3.9% over the next five years. The important 18-to-34 age group accounts for more than 24% of the total population. Within 250 miles, occupiers can reach 14.5 million consumers.
Figure 1: Florida Panhandle Region Population Analysis
Source: CBRE Location Intelligence.
Figure 2: Florida Panhandle Warehouse & Storage Labor Fundamentals
Source: CBRE Labor Analytics.
Location IncentivesOver the past five years, there have been 12 economic incentive deals totaling $5.6 million at an average of $6,465 per new job in the Florida Panhandle, according to WAVTEQ.
According to CBRE’s Location Incentives Group, among the top incentive programs offered in the Florida Panhandle is the Quick Response Training grant, which provides funding to new and expanding businesses in Florida to train new full-time employees. Businesses that are awarded grant funding are typically in high-skill industries, produce exportable goods and services and have wages that are 125% above the state or local average.
Florida also offers property tax abatements for new construction, a Capital Investment Tax Credit (CITC) and a High Impact Performance Incentive (HIPI). CITC is a corporate income tax credit for companies that make a minimum investment of $25 million and create at least 100 new high-paying jobs, while HIPI is a cash grant for companies that make a minimum investment of $50 million and create at least 50 new high-paying jobs.
Additionally, Triumph Gulf Coast is a $1.5 billion competitive economic development fund that provides $80 million annually through 2033 for workforce training, improved infrastructure, tax abatement and other benefits.
Figure 3: Top Incentive Programs
Source: CBRE Location Incentives Group.
Logistics DriversThe Florida Panhandle includes Pensacola, Destin/Fort Walton Beach/Okaloosa County, Panama City and Tallahassee. Interstate 10 is the major highway across the region, running for 360 miles from the Alabama border to Jacksonville. The region is served by three seaports. The growing Port of Panama City offers terminal services to shippers in Georgia, Alabama, Florida, Tennessee and the Carolinas and has received significant funding through Triumph Gulf Coast for infrastructure upgrades and new buildings. The full-service Port of Pensacola has access to both a Class 1 rail line (CSX) and Pensacola International Airport, while Port St. Joe is adjacent to 5,000 acres of developable land. In addition to Pensacola International, Northwest Florida Beaches International Airport in Panama City and Tallahassee International Airport also provide air cargo services to the region.
Supply & DemandThe Florida Panhandle industrial market has robust demand from e-commerce companies and third-party logistics providers. The region also has a large military presence in need of high-tech, manufacturing and R&D facilities.
The Panhandle’s industrial space inventory totals 35.7 million sq. ft., mainly in facilities of less than 50,000 sq. ft. One large industrial development project is currently underway: a 630,000-sq.-ft. warehouse in Tallahassee for a national e-commerce retailer. In 2020, a new 750,000-sq.-ft. distribution facility was completed in nearby Monticello for a major medical dispensary company.
Robust demand over the past four years lowered the region’s overall industrial vacancy rate to just 2.1% in 2021, down nearly 1 percentage point from 2020. Average rent grew by 1.3% year-over-year to $7.01 per sq. ft., up by more than 45% from five years ago.
The Panhandle’s proximity to vital transportation routes and its strong population growth will make it very attractive to manufacturers, e-commerce companies and third-party logistics providers for the foreseeable future.
Figure 4: Florida Panhandle Industrial Market Statistics
Source: CBRE Research.
Figure 5: Florida Panhandle Industrial Facilities Size Range Comparison
Source: CBRE Research.