JACKSONVILLE, FL-In what amounts to another drain on Downtown Jacksonville’s office market, Fortegra Financial inked an 11-year, 58,000-square-foot lease at Flagler’s Deerwood South. The financial insurance services firm will relocate its corporate headquarters to Jacksonville’s suburbs.
Ross Carrier, Flagler’s senior director of leasing, represented Miami-based Flagler in the transaction. Craig McCaw and Andy Davidson of Chicago-based MB Real Estate and Brad Chrischilles of Jacksonville-based CNL Commercial Real Estate represented Fortegra Financial. Emerson Lotzia, a partner with Foley & Lardner, represented the tenant.
“We chose to relocate our corporate headquarters to Flagler’s Deerwood South business park because of its convenient location, quality space offerings and world class corporate setting,” says Richard Kahlbaugh, president and CEO of Fortegra Financial. Earlier this month, Fortegra filed a registration statement with the Security and Exchange Commission to sell up to $125 million in stock to the public.
Located at 10151 Deerwood Park Blvd. in the Southside area, Deerwood South has grabbed two sizeable tenants from Downtown Jacksonville’s office market this year. The first was Adecco Group North America. Adecco signed a 78,292-square-foot lease at Deerwood Park in July. That’s bad news for a Jacksonville Economic Development Commission that’s actively working to revitalize the downtown area.
“There’s been some press here in Jacksonville about the issues surrounding the decline in downtown occupancies,” Karl Hanson, Flagler vice president and market officer of the firm’s North Florida operations, tells Globe.St.com. “I don’t think our winning these two tenants is an indictment on downtown. Vacancy is up everywhere. These relocations were just business as usual.”
The business park is located at the intersection of Southside Boulevard and J. Turner Butler Boulevard with easy access to Interstate 95, other major roadways and the neighboring St. Johns Town Center. Deerwood South is the location of choice for many businesses, including JP Morgan Chase.
The Jacksonville office market continued to remain relatively flat in the third quarter, with only 2,149 square feet of negative absorption for the year, according to CB Richard Ellis’ Third Quarter 2010 MarketView for the Jacksonville office sector. Although terms of the Fortegra deal were not disclosed, landlords are generally offering strong concessions.
“The suburban market has been fairly active,” Chrischilles tells GlobeSt.com. “Besides Adecco, Availity is taking down 50,000 square feet. PNC Bank inked a lease for 60,000 square feet. Our suburbs are absorbing space. It’s a shame to see tenants moving out of downtown, but many times that can create opportunities for new tenants.”