IRR-Jacksonville Mid-Year Viewpoint 2015 Local Market Report - Multifamily
The outlook for Jacksonville remains optimistic as the unemployment rate remains below 6%, which as of March 2015 is 5.4% in comparison to 5.5% for Florida and 5.5% National. Over 10,000 jobs were added in Jacksonville since December 2015 and the job market is anticipated to grow steadily through 2016. Jacksonville is also among the top 10 cities for college graduates. There are approximately 2,500 apartment units in various stages of construction and recently built communities have generally experienced good absorption, ranging from 15 to 25 units per month.
The Urban submarket is seeing its first new construction since 2007 with the development of over 900 units within 220 Riverside, Riverside Park and The Brooklyn at Riverside. There are over 1,000 additional units proposed outside the core area scattered throughout Jacksonville. Newer projects are offering an array of upscale amenities and the continued demand for rental units has offset the impact of new apartment inventory over the last year and rental rates have generally been increasing 2% to 4%.
Rent concessions are typical during lease-up for new product, however as occupancy remains over 90%, concessions are limited and offered only periodically as needed in Class A and B stabilized properties. Occupancy stands at 93% citywide and is anticipated to continue to improve. Capitalization rates for Class A projects are generally below 6% and the more favorable debt terms have been an incentive to developers to build more product. In conclusion, we anticipate the the multi-family market to remain in equilibrium at least over the next 2-3 years with continued construction of upscale, Class A projects, stable occupancies and increasing rent levels. Sales activity should also remain robust over the next two year horizon, with a focus on stabilized Class A projects, and Class B and C projects that are well positioned, having significant upside potential via renovation program.
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IRR Mid-Year Viewpoint 2015 comprises a National Overview report and 300+ two-page Local Market Reports for all key property types as well as additional resources, including metrics methodology, graphs, and tables; these free reports may be downloaded from IRR’s site here.