Jacksonville Powers Through

A relatively limited amount of new multifamily construction in Northeast Florida has kept the occupancy rate above its historical average, presenting opportunity for increased rent growth.

Jacksonville rent evolution, click to enlarge
Jacksonville rent evolution, click to enlarge

Apartment demand continues to outweigh supply in Jacksonville. A relatively limited amount of new construction in Northeast Florida has kept the occupancy rate above its historical average—at 95.3 percent as of September 2017 and up 200 basis points since 2013—leaving room for above-trend rent hikes.

Despite the metro losing jobs in September due to Hurricane Irma, Jacksonville continues to outpace the U.S.’ average employment growth. Job creation by logistics and health-related companies reduced the area’s unemployment rate to a 10-year low. Advancement in the local medical community, as well as other high-paying professional industries, contributed to a rapid absorption of newly developed apartments. This trend is likely to continue, as more projects are coming online, such as a new heart and vascular pavilion at St. Vincent’s Medical Center Riverside and the upcoming urgent-care facility within the Wildlight master-planned community in Nassau County, which is set to include 1,000 homes across 260 acres in its initial phase.

Continued market strength has generated increased investment demand, pushing property values to a post-recession high. Sales, which reached nearly $1.4 billion in 2017, also reached a cycle peak. As a wave of new deliveries is scheduled to come online over the next few months, we expect demand to remain strong, sustained by employment growth, favorable demographics and lifestyle preferences.

Read the full Yardi Matrix report.