Jacksonville Multifamily Report – Summer 2020
The metro's average rent slid 30 basis points in three months, underperforming against the U.S. average.
Jacksonville rent evolution, click to enlarge
Following a strong 2019 for both investment volume and completions—the latter of which saw a new cycle peak—Jacksonville’s multifamily market hit the brakes as the health crisis began to hold sway over the metro’s economy. Rent growth contracted by 0.3 percent on a trailing three-month basis through May, with the upscale Lifestyle segment—a class susceptible to reduced demand in challenging times—recording a 0.5 percent drop.
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Leisure and hospitality was the first sector impacted by the coronavirus-induced nationwide lockdown, but others followed suit. A Northeast Florida Regional Council study found that, even with the most positive outcome, more than 41,000 jobs, or 4.2 percent of the workforce, will be lost in the Jacksonville area. The same analysis showed that it will take more than two years for the metro’ economy to fully recover. In an effort to protect the city’s labor pool, authorities partnered with a local credit union and approved a $28 million relief package for small businesses.
Jacksonville sales volume and number of properties sold, click to enlarge
In the first five months of the year, $354 million in multifamily assets traded in Jacksonville and only one 301-unit property came online. Despite multifamily historically remaining a favored asset class due to its lower volatility, we expect investor appetite to further soften moving forward, only to rebound next year when the aftermath of the coronavirus crisis will likely be more apparent.
