Q4 2022 Multifamily Real Estate Report: Jacksonville, FL
Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.
Jacksonville, Florida, is a vibrant and growing city with plenty to offer. Located along the picturesque St. Johns River in northeast Florida, Jacksonville’s multifamily real estate market has seen an increase in development over the past few years as more people come to this sunny city for its healthy economy and diverse cultural attractions.
After gaining nearly 36,000 job positions from 2021 to 2022, Jacksonville’s unemployment was right at 2.5% in Q4 2022.
Over the last decade, Jacksonville’s population increased by 18.8%, and it remains one of Florida’s fastest-growing cities.
With both a strong economy and a steadily rising population, Jacksonville provides the foundations for a multifamily market worth considering.
General Area Overview & Demographics
Jacksonville is the largest city in Florida and is home to a diverse population of nearly one million people. Jacksonville has an estimated median household income of $56,741, which is slightly below the national average. Jacksonville’s population is growing at a rate of 1.9%, making it one of the fastest-growing cities in Florida.
Jacksonville has a thriving economy that includes industries such as finance, healthcare, manufacturing, shipping, and retail trade. There are numerous cultural attractions in Jacksonville, including museums and galleries that feature works by area artists and artisans.
Jacksonville’s Attractions & Climate
Additionally, many outdoor activities are available, including kayaking through the St. Johns River or walking down Jacksonville Beach Boardwalk. Big Talbot Island State Park is a great spot for beachcombing, hiking, and bird watching. Jacksonville’s Timucuan Ecological and Historic Preserve is a national park that offers visitors the chance to explore its pristine nature.
Jacksonville is known for its warm and humid subtropical climate. The city has an average of 235 sunny days each year, making it a great destination for those who enjoy the sunshine. Jacksonville experiences mild temperatures year-round, with winter lows averaging around 50°F and summer highs reaching up to 91°F
Summary of Jacksonville Multifamily Real Estate Performance in Q4 2022
While Jacksonville’s multifamily market isn’t as hot as it was in 2021, its performance remains positive.
For example, while rent growth at the beginning of Q3 2022 was below the average US rate of 1%, sitting at 0.5%, Jacksonville’s overall rent growth year-over-year (13.5%) outperformed the national average (12.5%).
Occupancy also is continuing a slight downward trend. In Q3 of 2022, it was at 94.5% and now has come down to 93.7%.
Construction has remained active throughout this year. It’s projected that roughly 3,800 units will have been made available by the end of Q4 2022, which would be the highest amount since 2019.
What are multifamily rents like in Jacksonville?
Multifamily real estate in Jacksonville saw its first decrease in the average asking rent, going from $1,545 in Q3 of 2022 down to $1,525 in Q4 2022, resulting from steadily declining occupancy since Q1 2022.
St. Augustine/St. John’s County is the only submarket performing above the national average for rent. St. Augustine/St John’s County sees averages of $1,840 while the US average is $1,780.
Jacksonville’s lowest-performing submarkets in terms of rent are Westside at $1,310 and Arlington at $1,370.
Purchase & Leasing Activity
Jacksonville multifamily assets are priced on average well below the national average. While the price has increased from $129,000 in 2021 to nearly $139,000 in 2022, the national average sits at $217,000
2021 saw $2.6 billion in transactions for multifamily property, while 2022 saw over $1 billion in transactions through Q4.
Notable Multifamily Real Estate Deals in Jacksonville in Q4 2022
There were several deals for multifamily real estate in Jacksonville.
- ApexOne Investment’s acquisition of The Felix for $66 million.
- Cyclone Investment Group’s acquisition of Oasis of Mandarin for $42 million; and
- BJB Partners’ acquisition of The Commons for $35 million.
These are select examples among others for Jacksonville’s multifamily real estate.
New Multifamily Real Estate Development Activity in Jacksonville in Q4 2022
While there are nearly 9,400 units under construction and another 28,000 in the planning and permitting stage, it’s expected that about 3,800 units will be delivered in 2022.
As of Q3 2022, nearly 1,600 of those 3,800 were completed. Accounting for 1.5% of existing inventory, this outpaced the nation’s average of 1%.
Most projects are taking place in upscale areas throughout Jacksonville’s submarkets. Downtown Jacksonville is also seeing activity, with 806 units under construction.
Market Forecast for Jacksonville’s Multifamily Real Estate Market
While certain indicators show a cooldown in Jacksonville’s market, this is in comparison to 2021’s highly active year.
Jacksonville’s multifamily market is still expected to continue to grow as more deliveries are made from the pipeline, permitting plans are approved, the population continues to grow, and the economy continues to perform well.
That said, rents, occupancy, and sales prices will likely decrease throughout the beginning of 2023, yet the city is still expected to retain an atmosphere of prosperity.
Takeaways for Multifamily Real Estate Investors
While investors should keep an eye on Jacksonville’s decline in asking rent and increasing vacancies, the economy and population growth should keep the market moving at a sustainable pace.
With lower pricing than other state markets, Jacksonville is a draw for investors, particularly those out-of-state: Out-of-state investors made up over 60% of the deals that occurred throughout 2022.
Nothing can be said for sure, and each investor will have to do their research, but there are indicators that investing in multifamily real estate in Jacksonville is a worthwhile consideration.
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