After three years of tepid employment growth, the Jacksonville metro is poised to create 12,500 new jobs before year’s end—amounting to a 2.1 percent increase, with even more expected in 2014. As a result, vacancies are expected to recede back to pre-2007 levels, with minimal deliveries expected over the next two years.
Hendricks-Berkadia reports that sectors such as finance, education and health care have been integral to the boost in jobs, with locally based Foundation Financial Group creating 60 new positions within the past year. Additionally, expansions of several hospitals such as St. Vincent’s Medical Center Clay County and Brooks Rehabilitation are expected to create nearly 800 new jobs.
All of this positive development in the local economy has brought the overall vacancy rate down to 8.1 percent, with another 60 basis points expected to be shaved before the end of the year. While this figure ranks far higher than the national average, it is far lower than the near-15 percent rate seen at the height of the recession in 2009.
Additionally, the pace of rent growth is expected to rise, with asking rents expected to rise 3.4 percent to $849 per month in 2013 and 4 percent to $883 per month in 2014. The most expensive submarket continues to be the areas near the beach, with rents there rising 3.4 percent to $1,029 between 2011 and 2012.
As alluded to previously, hiring is expected to accelerate even further over the next 18 months, with another 19,000 positions expected to be added throughout 2014. Other metro employers seeking to expand their operations include the Mayo Clinic, CMG Financial, and Digital Risk—the latter of which has a plan to bring 1,000 jobs to the state over the next few years.
While permitting activity is expected to pick up pace over the next two years, actual deliveries will remain modest, with 560 units and 675 units expected to be completed in 2013 and 2014, respectively. One of the larger developments currently under way, the 294-unit 220 Riverside, is slated for completion by the end of this year.
With a pause in bulk completions and demand on the rise, the metro is likely to see a marked increase in investment activity throughout the current development cycle.
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