Jacksonville 2013 Multifamily Operating Performance Exceeds Expectations

Most national market researchers placed Jacksonville at or near the bottom of their major market apartment investment lists for 2013. The reasons for this placement are above average vacancy rates and below average rent growth. But they underestimated how the market was actually going to perform.

At 6.8%, Jacksonville has the second highest 2013Q2 vacancy rate of the 82 markets surveyed by REIS (only Memphis is higher). But its 150 BPS decline from 2012Q2 to 2013Q2 is the largest of any of the major markets. And it is 160 BPS below Jacksonville's 10-year average vacancy rate. It is also running as much as 150 BPS below analysts' projections for 2013.

Effective rents have risen 2.1% from 2012Q2 to 2013Q2 according to REIS, below the national average but well within the mid-range of major markets. This occurred while simultaneously reducing vacancies. Operating expenses remain relatively flat. So NOI is rising significantly on higher rent income.

The result is better performing multifamily investments in Jacksonville that are exceeding expectations at this time. In future posts we will examine the reasons for this better than expected performance. We will also try to look into the future to see if this performance can be sustained. Of course, we will also look at the implications for multifamily owners.

If you would like to discuss these thoughts in more detail, please contact me:

            Paul B. Hazlett
            Multifamily Advisor
            Coldwell Banker Commercial - Benchmark
            904.281.1990 x8523
            PHazlett@CBCBenchmark.com