Reports: Low vacancy rate spurs multifamily boom in Jax over past year

Jacksonville’s multi-family market continues to experience serious growth, according to reports from three leading brokerages.

NAI Hallmark reported a rent per unit at $1,517, and rent growth increasing by 2.3% from Q4 2022. The report found 93.5% of apartments are occupied.

Senior Vice President of Multifamily Investment Sales John Rutherford noted a complex macroeconomic situation did not deter Jacksonville from becoming a hotspot for multi-family investors due to its job and wage growth fundamentals.

“Although net absorption in North Florida remained positive in Q1 2023, occupancy may drift slightly lower than the historical trend as several submarkets integrate this next wave of supply,” he said in the report. “Rent growth in Q1 2023 returned to normal historic levels, 2%-4%, while the (Metro Service Area) continues to be the most affordable major Florida market.”

Franklin Street’s findings include $1,510 rent per multifamily unit and a vacancy rate of 10.8% in the firm’s brief report said.

Franklin Street’s analysts said the city remains in a transformative period. The investment has been akin to a domino effect, it said. Jacksonville remains cheaper compared to other Florida metro areas, causing multifamily investors to circle the First Coast.

“While the market has done well to capture many of the residents and businesses that have migrated away from the Northeast, large corporate relocations and reinvestment into the downtown and port areas have created new jobs that are drawing life back into the metro,” the report stated.

Marcus & Millichap’s report said area’s multifamily housing inventory grew by 5.5% during the 12 months ending in March and said almost 16,000 units are in Jacksonville’s pipeline, spurred by record low vacancy rates in the second half of 2021.

With about 5,000 more units built than were absorbed, the vacancy rate increased year over year by 3.6 percentage points to 6.5% — the largest 12-month vacancy increase on record, according to the report.

“A number of projects that broke ground will reach completion this year, with builders set to deliver more than 6,000 units for just the second time on record. New supply, however, appears well placed. Mandarin has had positive net absorption for 12 consecutive quarters through this March and is slated to add the most rentals this year,” the report stated. “… Overall, Jacksonville may attract more budget-aware luxury renters, as the metro is home to the lowest Class A rent among major Southeastern markets.”

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