Construction set to begin on Margaritaville in Jacksonville Beach

It will be located between Sixth and Seventh avenues next to the Casa Marina Hotel.

On Friday, construction crews were on-site testing equipment for construction. They expect work to begin next month once all the proper permits are received.

The new resort will be eight stories high with more than 200 rooms. It will have an internal parking garage and several outdoor amenities including a pool and fire-pit. The hotel will also have a fitness center and a restaurant.

Several residents told News4Jax they think it will be a good addition to the area. Other residents who live nearby said they're concerned about extra traffic. They said congestion gets bad on the weekends during special events and fear it might get worse.

The eight-story resort is an exception to a city ordinance that does not allow new buildings to be built that are more than three stories. According to the architect, the hotel will have car lifts in a valet parking garage to help manage space.

By Jennifer Ready - Reporter

Posted: 6:38 AM, January 07, 2019

Margaritaville Resort Coming Soon

Expanding into new areas? Check out our regional summaries here:

Are you expanding in new areas?  Thinking of relocating your headquarters?  Check out our Coldwell Banker Commercial available properties before you make your final decision.

Regional Market Properties

Managing Cyber Risk in Commercial Real Estate

Unlike the high-profile financial services, health-care and retail industry victims that have traditionally been exploited, the real estate industry is—mistakenly—perceived as far easier to crack.

CRIMINALS ARE AFTER TWO THINGS: INFORMATION AND MONEY

Commercial real estate transactions frequently include rich information for cyber attackers. Personal information about buyers, sellers and tenants—included in rental applications, credit reports, leases and rental agreements—contain valuable personal information, including names, birth dates, social security numbers, addresses and driver’s license numbers. If accessed, it can be used to access personal accounts and can also be sold on the dark-web to other cyber criminals.

But, commercial real estate firms are also heavy targets because they includes large sums of cash on their balance sheets to acquire or finance real estate properties. Cyber criminals employ increasingly sophisticated techniques to trick well-meaning employees into providing access to this information.

In both of the above scenarios, the most common and effective attack is found in phishing—a cyber attack strategy that can take several forms. Below are three of the most prevalent:

Managing Cyber Risk in CRE

States will be allowed to collect sales tax for online purchases

Today was an historic and important day for our industry. The United States Supreme Court ruled in favor of overturning the outdated standard set in of the 1992 Quill decision that prevented states from collecting sales tax for online purchases. The decision in South Dakota v. Wayfair was 5-4, and signaled that the justices recognized the need to bring the law into the 21st century. This is a critical step in leveling the playing field between brick-and-mortar retailers and online-only sellers. ICSC has been actively engaged in this issue for more than a decade, aggressively advocating for sales tax fairness on our members’ behalf. More recently, we led the real estate amicus brief in support of the tax law passed by the State of South Dakota. The victory means that state’s rights have been restored and they will now be allowed to implement sensible laws to collect the sales tax they depend on. The next step is for state and federal lawmakers to create formal tax policy that supports fairness and ICSC will continue to be actively involved on this front. We are pleased with the court’s ruling and knowing that the free market principles that are central to America’s economic system can once again be applied fairly to retailers across the country. Sincerely, Tom McGee ICSC President & CEO

ICSC Is Commercial Real Estate Professionals' Super Bowl

ICSC Is Commercial Real Estate Professionals' Super Bowl: With an estimated attendance of 37,000 people and 12,000 booths, ICSC’s RECon is dubbed the largest retail real estate convention in the world.

Office leasing activity across the nation advanced in the first quarter, with tenants absorbing 5.2M SF, up from the negative 406K SF absorbed during the same period last year.

Read more:

https://www.bisnow.com/national/news/office/strong-q1-office-fundamentals-suggest-market-still-has-room-for-expansion-87522?rt=57392

DIA to discuss new convention center in downtown

By Derek Gilliam  –  Reporter, Jacksonville Business Journal

Jan 16, 2018, 4:06pm

The Downtown Investment Authority will discuss selling the old city hall annex and courthouse properties to a developer to build a convention center along Bay Street at its Wednesday meeting.

The agenda item would allow DIA CEO Audra Wallace to send out a request for proposals that would seek development of a minimum of a 350-room, full service convention center, parking garage and public convention space at 220 and 330 Bay streets.

“The DIA envisions a new convention center, hotel and parking garage, if developed, to be an immediate enhancement to the financial viability and dynamism of surrounding facilities in the urban core and sports complex and to the city,” the proposal read.

The resolution puts the following requirements for development of the convention center:

• Food and beverage (including a full service restaurant)
• Recreation
• Retail
• Function space (wedding receptions, banquets etc.)
• Full service hotel (minimum - 350 rooms)
• Public exhibit hall (minimum - 200,000 square feet)
• Ballroom (minimum - 40,000 square feet)
• Meeting / breakout rooms (minimum – 45 rooms)
• Transient boat slips (optional)

Parking Garage

• Hotel Parking Spaces (minimum 400 spaces)
• Convention Center Parking Spaces (minimum 1,300 spaces)

The meeting will take place Wednesday at 2 p.m. on the eighth floor of the Ed Ball Building.

Commercial real estate technology

Commercial real estate technology is an important and growing investment. Real estate professionals increasingly rely on a host of devices, software and applications to do business. Which digital tools do they value most, and what devices are they using to access them? And how are these professionals’ technology habits likely to change in the years to come? Learn more from our infographic link below: Commercial real estate technology infographic

WINTER IS COMING!!!!

8 Great Tips 

from Duval Landscape Maintenance on 

How to Prepare your Property for Winter Weather!

Winter is quickly approaching! Although, in Florida we are not likely to see any snow, you should still prepare our landscaping for cooler weather. All it takes is one night of temperatures in the low 30s to 40s for your most loved plants and shrubs to receive damage.

Here are a few Duval Landscape landscaping tips you should consider in order to protect you plants and shurbs:

1. Pruning and maintaining trees is often left off the list when it comes to winter planning. It’s a great time of year to selectively remove branches to provide clearance, reduce risk of breakage, or reduce size. If you are unsure about proper pruning techniques, consider hiring an arborist-a specialist in the care of trees-to prune your trees.

2. Mulch moderates soil temperatures, keeps roots warmer in the winter and cooler in the summer. It also helps sustain soil moisture, reducing the water needs of trees. Mulch inhibits weeds, helps reduce soil erosion, and can improve soil, which improves or maintains tree health. Mulch with coarse materials such as pine nuggets or pine straw applied to depth of 3-4 inches, but do not allow mulch to accumulate to greater depth. Mulch will insulate the plant absorbing the sun’s radiation using it at night to keep your plants, flowers and trees warm, just like a blanket uses our body heat to keep us warm at night.

3. Continue to water newly planted plants, trees and shrubs since it doesn’t rain often in Florida during the winter. Most of the above ground plant is dormant however the roots can continue to grow if adequate moisture is present.

4. Cover tender plants by using cloth, such as old sheets or quilts, burlap or special covering from local nurseries that is made for plants and always avoid using plastic. Plastic will cause condensation to form on the leaves from freezing temperatures, which results in the leaves burning in the sunlight.

5. When using outdoor lighting and/or decorations that require electricity, be careful when running extension cords and other power sources on the ground or through your landscaping

6. Make sure to discuss any electrical power sources that are outdoors with your landscaper or maintenance personnel. You wouldn’t want your holiday lights run over by the lawnmower, would you?

7. This is a great time of year to put poinsettias outdoors to show off their beautiful, bright red color. A few places you might want to consider are your community clubhouse, guardhouse, or even pool area.

8. Even though a Florida fall isn’t very cold, it’s still a good time to start preparing your lawn for the cold weather. Shorter days, lower light intensity, and cooler temperatures results in slower-growing lawns. Timing is important, the last recommended time to fertilize your lawn in North and Central Florida is October / November. A high-potassium fertilizer would be best for this time of year.

Note: Hiring a knowledgeable Property Manger, like Benchmark Asset Services,  to oversee your landscaping maintenance is also a cost effective option to ensure your investment is cared for properly. 

Bartram Park is about to get a lot more retail

The master developer of Bartram Park has submitted civil plans for an 81,000-square-foot retail center at Racetrack Road and Bartram Park Boulevard.

John Dodson, development manager for Eastland, said Bartram Market straddles the Duval County and St. Johns County line with 90 percent of the planned project located in St. Johns. The 38-acre center will focus on retail, restaurants and commercial services, however, Dodson did not disclose any signed tenants at this time.

A site map shows the first out parcels running along the west side of Bartram Park Boulevard with the majority of the center fronting Racetrack Road. England-Thimes and Miller Inc. is completing the civil work on the project.

he footprint of the anchor tenant would make sense for a grocer at 45,600 square feet.

Dodson said that construction should start in the first or second quarter of 2018.

To read the entire Jacksonville Business Journal Article, please click the link below:

                                                           
                            Bartram Market coming soon

Life Storage Blog Moving & Travel 7 Reasons Why Moving to Jacksonville, FL is the Right Move for You

    

Molli Spear

Whether you’re seeking beautiful coastlines, top-notch restaurants or cultural communities, moving to Jacksonville, FL could be the right move for you.

27 Shares

Are you considering moving to Jacksonville, FL? Known as the largest city in the Sunshine State (and largest city in the continental U.S.), Jax boasts over 850 square miles of stunning beaches, thrilling attractions and natural beauty. The city’s distinct neighborhoods also provide the perfect destination for young professionals, families and retirees.
Whether you’re seeking beautiful coastlines, top-notch restaurants or unique, cultural communities, it’s time to experience all that Jax has to offer. We put together eight reasons why relocating to Jacksonville could be the right move for you.

1. Jacksonville is a world-class arts destination.

If you’re moving to Jacksonville, FL, it won’t take you long to discover that music and art are everywhere. It’s the birthplace of Southern rock and home to a strong tradition of jazz and blues.
From music festivals to classical shows, your entertainment options are endless on this side of the Sunshine State.

See why Jacksonville lives among the top 25 arts destinations in the U.S:

Jacksonville Jazz Festival

Held every Memorial Day weekend, the Jacksonville Jazz Festival is one of the largest festivals in the country. Spanning 15 blocks downtown, the festival features live jazz, local food and a vibrant street atmosphere. The best part? It’s free!

Museum of Science and History (MOSH)

Jacksonville’s MOSH features Northeast Florida’s cultural history, interactive exhibits and the Bryan-Gooding Planetarium–the largest single-lens planetarium in the world. Visitors can attend a cosmic concert, a guided tour along the St. Johns River or host their own parties.

Art Walk

If you’re big on shopping local, you don’t want to miss Jacksonville’s Art Walk. Here you’ll find a free tour through downtown Jacksonville, featuring pop-up galleries, marketplaces, food trucks and music. Art Walk takes place on the first Wednesday of every month from 5-9 p.m.
“Attending Art Walk is a great way to be part of the arts scene here in Jacksonville,” notes event manager Alexandra Abreu-Figueroa. “Each month we see more than 60 venues, 250 artists and 800 attendees. We encourage residents to come meet people, buy some artwork and be a part of the experience, and we look forward to seeing those numbers grow!”

Alhambra Theatre & Dining

With a thriving live performance scene, you can’t miss Jacksonville’s theatre entertainment. Alhambra Theatre & Dining is the nation’s oldest operating professional dinner theatre–not to mention the only professional theatre between Atlanta and Miami. Enjoy themed, delicious dinners with each entertaining show.

Riverside Arts Market

Enjoy Jacksonville’s arts, food and music scenes as they merge every Saturday from March through November. Browse artist’s handmade creations and local food vendors as you enjoy loads of live music. There’s even a weekly kids’ activity for the little ones!

2. It’s always beach season in Jacksonville.

Jacksonville, FL operates the largest urban park system in the entire country—with 337 locations on more than 80,000 acres. In addition to municipal parks, you’ll find national facilities, ten state parks and several gardens and arboretums in the area.
Between its abundant waterways, stunning beaches and access to hundreds of piers, Jacksonville, FL is a water lover’s dream. Whether you prefer romantic sunset cruises or adventurous surfing and diving trips, it won’t take long to fall in love with Jacksonville’s sun and sand.

Soak in the sun and sand.

Minutes from downtown Jax, you’ll find 22 miles of uncrowded, white sandy beaches. Jacksonville offers three different beach areas: Neptune Beach, Atlantic Beach and Jacksonville Beach. Soak in the sun, catch some waves or check out the happening Jacksonville nightlife. Nearby, you’ll also find the historic village of Mayport. Explore casino boats, freshly caught seafood and Kathryn Abbey Park—offering Jacksonville’s best camping, hiking and biking spots around. For just $1 fare, locals can also hop a ride on the Beaches Trolley to explore the nearby neighborhoods and attractions.

Drop a line.

In every lake, river, pond and creek, you’ll find top-notch fishing spots that few other regions get to experience. Fishing enthusiasts can enjoy Jacksonville’s convenient water access (including deep fishing waters just 30 minutes from downtown), wide variety of fresh and saltwater species, and world-class angling. Drop a line on Jacksonville’s shorelines, head to the pier or charter a boat for some deep sea fishing. If you’re into serious fishing, consider entering the Jacksonville Kingfish Tournament in July.

Put your boat in.

With more shoreline than any other city in Florida, Jacksonville has plenty of opportunities to explore the waterways. Spend time on the St. Johns River, cruise through the Intracoastal waterway or hang out offshore in coastal waters. Locals will tell you that the best view of Jacksonville is from the water, so bring your own boat to the marina or check out the canoe and kayak launches.

Explore under the sea.

For those on the more adventurous side, we have some good news for you: Jacksonville’s extensive reef system offers one of the best diving spots on Florida’s east coast. You’ll find over 30 offshore and two inshore reefs attracting a wide variety of colorful marine life. Plan a diving expedition or a scuba session to explore the corals, sponges and pristine reefs.

3. Jacksonville offers tons of family fun.

If your family enjoys sightseeing and entertainment, you’re moving to the right place. Families love the “River City by the Sea” because of its relaxed, fun and affordable atmosphere. You’ll find fun things to do in Jacksonville for kids of all ages.

What to do in Jacksonville, FL:

The Jacksonville Landing

Nestled along the St. Johns River in downtown Jacksonville, the Jacksonville Landing is a waterfront complex full of shopping and entertainment. Burrito Gallery, Chamblin’s Uptown Cafe and American Grill all offer extensive kid’s menus and you’ll even find magicians and balloon artists wandering through the restaurants!

St. Johns River Taxi

Looking to explore Jacksonville with the kids? Hop on a water taxi! You can ride across the St. Johns River to the Northbank for only $5 (and $4 for kids). Hop off at the Jacksonville Landing to explore downtown or ride it for the entire loop to enjoy breathtaking sunsets and live music.

Adventure Landing

If you need to let the kids run wild, take them to Adventure Landing! Play in the arcade, race go-karts around the track or hit up a round of mini golf. Adventure Landing is also home to Shipwreck Island Waterpark, featuring four major water slides, rides and endless fun for kids who want to test their adventurous side.

Kingsley Plantation

Tucked away in the Timucuan Ecological & Historic Preserve is Kingsley Plantation—Florida’s oldest plantation house. Take a step back in time to learn the story of freedom and enslavement, tour the plantation house and sign up for a ranger-led tour around the grounds. Kingsley plantation is open seven days a week and admission is free.

Jacksonville Zoo and Gardens

This is one of the top things to do in Jacksonville, FL. Sitting at the mouth of Trout River, The Jacksonville Zoo and Gardens consistently ranks as a top animal attraction. The zoo occupies over 100 acres with over 2,000 animals and 1,000 plants in its collection. Ride the train, feed the giraffes or get up close and personal with tigers in the zoo’s wide open spaces!

Jax Sports

With great year-round weather and tons of teams to root for, sports will be a way of life if you’re moving to Jacksonville, FL. The area is home to eight pro sports teams, four college teams and tons of year-round events. Cheer on the Jacksonville Jaguars, take a swing on one of the 70 golf courses around or test your luck at any of Jacksonville’s water sports.

4. There are great places to live in Jacksonville.

Living in Jacksonville, FL comes with endless perks. From miles of natural beauty and authentic dining options to thrilling attractions, Jax offers an array of different neighborhoods for young professionals, couples and families. Not to mention, the median age in Jacksonville is 35—younger than any other city in Florida.

READ ALSO:  Breaking up is Hard to Do: Staying Organized in a Divorce

Here are some of the best places to live in Jacksonville:

San Marco

San Marco was built in the 1920s to resemble the Piazza San Marco in Italy. Here you’ll find an eclectic arts and shopping district with trendy bistros, distinctive boutiques and diverse people.
Location: south of downtown and north of Mandarin.
The neighbors: single professionals, creatives and artists.

Northside

Once a heavy industrial area, the Northside has turned into a residential area with several acre lots and new home developments. It’s also close to the airport, shopping and several state parks and nature preserves. While downtown Jax is only minutes away, the Northside remains somewhat rural and peaceful.
The location: 20 minutes northeast of the city.
The neighbors: families, retirees and first-time homebuyers.

The Beaches

Did somebody say Salt Life? The Atlantic, Neptune and Jacksonville Beach areas host some of the priciest and desirable neighborhoods in Jacksonville. The median home price in the area is around $300,000, which comes with close access to the water and outdoor life.
Location: east of Jacksonville along the coast.
The neighbors: families and retirees.

Southside

Southside and Mandarin are loaded with history and boast some of the most stunning river views in all of Jacksonville. The residential area has a low crime rate, great schools and an extensive network of parks and recreation development. It was even described as a “tropical paradise” by author Harriet Beecher Stowe!
Location: south of San Marco along the St. Johns River.
The neighbors: families with young children and young couples buying their first home.

Westside

If you love the water and prefer living in a rural setting, the Westside and Orange Park are for you. The Westside area features full-service marinas, boating facilities and the Naval Air Station Jacksonville. This neighborhood offers reasonable house prices, several-acre lots and a relaxing break from the hustle and bustle downtown.
Location: Just south of Jacksonville and west of the St. Johns River.
The neighbors: Navy families, horse lovers and people who desire land.

5. Jacksonville is for food lovers.

If you’re relocating to Jacksonville, you’re in for some full-fledged flavor of the coast. No other Florida city offers Jacksonville’s unique flavors, thriving culinary scene and internationally renowned chefs. The area even made it to Forbes list of five surprising foodie cities to visit—for good reason!
From kid-friendly restaurants and sandwich shops to locally sourced seafood and upscale bistros, you’ll find it all. Here are some Jacksonville food joints you won’t be able to pass up.

American Eats

For those with a hankering for sandwiches and burgers, the options are endless. French Pantry has the freshest bread and longest line, for good reason. At Maple Street Biscuit Company you can satisfy your brunch cravings with a delicious chicken biscuit. Don’t forget to check out Kickbacks and Goozlepipe & Guttyworks, the best Gastro-pub Jax has to offer!

Food Trucks

Jacksonville boasts almost 100 different food trucks. Whether you’re on-the-go, hungry during your shopping outing or just in the mood to try something new, Jax food trucks offer creative options for every craving. Be sure to get a taste of some of the top favorites: Salty Dog, The Butt Hutt Smokehouse, Funkadelic Food Truck and Mother Truckin’ Pizza. Check out the full list of vendors here.

Farm to Table

For those with an appreciation for eating local, Jax has over 20 locally owned, farm-to-table restaurants. You’ll also find over 30 restaurants with vegan menus and gluten-free options. Orsay, 904, and Black Sheep Restaurant all offer elegant, locally sourced cuisine. Kitchen on San Marco also consistently ranks as the top farm-to-table restaurant in Jacksonville.

Ethnic Cuisine

When you feel like mixing up the menu, there are plenty of ethnic options in Jacksonville. Green Erth Bistro offers Middle Eastern cuisine and vegan fare. Nile Ethiopian Restaurant has fresh Ethiopian cuisine and great customer service. For a taste of Lebanese food, visit Mandaloun Mediterranean Cuisine located near Deerwood Village.

Seafood Galore

Seafood is a must in Jacksonville. Visit Clark’s Fish Camp in Mandarin or Whitey’s Fish Camp in Orange Park for the down-home fish camp experience. If you’re looking for local seafood but want to head somewhere classy, check out North Beach Fish Camp or Bistro AIX raw bar. Wherever you go, don’t forget to request the culinary staple, the Mayport Shrimp!

6. It’s close to other major cities.

One of the best parts of moving to Jacksonville, FL is its convenient proximity to other major cities. Located in northeastern Florida where the St. Johns River meets the Atlantic, Jax isn’t far from Georgia, Alabama or other major cities in Florida. Whether you’re moving to the Sunshine State for the first time or just relocating a short drive away, you’re going to love Jacksonville’s convenient location to the following cities:
Atlanta. If you’re looking to get a taste of Atlanta’s heritage and Southern hospitality, you’re in luck. The drive from Atlanta to Jacksonville is around 4 hours and 50 minutes without stops.
Miami. When it comes to cities in Florida, Miami is the life of the party. Each year, the city expects 14 million visitors. If you plan to check out its beaches and exciting nightlife, the drive from Miami to Jacksonville should take around 5 hours and 25 minutes by car.
Naples. Known for its high-end shopping, sophisticated dining and world-class golf courses, Naples, FL is an affordable family destination for beach enthusiasts. You can travel from Jacksonville to Naples in about 5 hours and 30 minutes by car.
Orlando. So, how far is Jacksonville from Orlando? Get this: the Jacksonville to Orlando drive time is only a little over two hours. You can pack up the car, head to the most-visited destination in the U.S. and get there in no time.

7. There are plenty of jobs in Jacksonville, FL.

The cost of living in Jacksonville remains lower than the national average. Although the average home price is low, you’ll find Jacksonville to be deemed a seller’s market due to the low inventory and high demand for residential property.
The good news: the unemployment rate in Jacksonville is around 4%, which is 0.3% lower than the national average. Jacksonville is also second in job growth in the state of Florida, right behind the Orlando metro area.
Jax is home to four Fortune 1,000 companies and three Fortune 500 company headquarters, more than any other city in Florida. The area presents attractive markets in finance, logistics and hospitality due to its growing epicenter for restaurants, retail and commercial housing.
If you’re moving to Jacksonville, FL and currently job searching, you won’t find a shortage of job opportunities. Here are some of the top companies in Jacksonville:

• Fidelity National Financial
• Fidelity National Information Services Inc.
• Landstar System
• Winn-Dixie
• Hyatt Regency

With NAS Jacksonville nearby, Jax also has the third largest military presence in the country. The city was originally named after General Andrew Jackson, the first military governor of Florida. Today, the military employs over 30,000 active-duty personnel and nearly 20,000 civilians in the Jacksonville area.

Moving to Jacksonville, FL?

If you and your family have an appreciation for an exciting nightlife, world-class attractions and life on the water, it’s time to experience a new side of the Sunshine State. Moving to Jacksonville, FL might just be your best move yet.
Whether you’re relocating across the state or hauling your things across the country, don’t forget that Life Storage can help store your belongings. Find self storage in Jacksonville to make your move as stress-free as possible.
Do you have any questions or advice for those moving to Jacksonville? We’d love to hear from you. Leave us a comment below!

What's driving shoppers back into stores? Find out here:

One-of-a-kind Shopping Experiences and Perks                       Driving Customers Back In-Store                                         Read article here:

Benchmark Asset Services' Property Manager Named Recipient of IREM's "30 Under 30"

CBC Benchmark's affiliate, Benchmark Asset Services, LLC, is proud to announce that our Property Manager, Jasmyn Sylvester (Santiago), has been selected as one of the 30 under 30 recipients for the Institute of Real Estate Management. 

The IREM 30 under 30 Program highlights 30 of the next generation of industry leaders who have made significant impacts in their career and community. Jasmyn will be featured in the July/ August edition of the JPM. Check out more on the IREM website. 

Tech Sector and CRE

It is no secret that the tech sector is making huge impacts in everyone’s daily lives and even disrupting and changing the way certain industries do business. The commercial real estate industry and real estate in general is no exception to this trend. There are a few companies helping to lead the disruption of the  CRE industry. Below we will take a look at which companies these  are and how they are helping to improve the industry through  disruption as well.

 Read More 5dontmissdisruptorsinthecretechspace

Coldwell Banker Commercial Blue Book 2016 Is Here

                             2016 CBC Blue Book

2014Q1 Jacksonville Apartment Market Review: Is the Jacksonville Apartment Market Facing Oversupply?

The Jacksonville apartment market bottomed in 2010 after the Great Recession with asking rents falling 1.1% from 2009 levels after a reaching a 2009 vacancy rate of 14.4%. Asking rents as of 2014Q1 are up 5.2% from 2009, but more importantly vacancies are down to 6.3%. With 1,428 new apartment units completed in 2013 and added to the Jacksonville inventory, many observers have wondered if the Jacksonville apartment market is headed towards another oversupply situation. They worry that the additional 2,247 units forecasted for completion in 2014 will aggravate the situation. So are we headed to an oversupply situation that will adversely affect rents and occupancy?

Demand Drivers

To assess the condition of the market we first need to look at the factors that drive apartment market demand (Figure 1).

Figure 1

Population growth is the basic fuel for housing demand. During the years preceding the Great Recession, Jacksonville’s population was growing at 2%+ per year based on a booming economy. In the aftermath of the Great Recession the population growth rate has been cut in half.

Employment growth impacts population growth by attracting in-migration. Jacksonville MSA employment bottomed in 2009 at 577,170 jobs, down 51,900 jobs from the pre-recession high of 629,070 jobs in 2007. Jacksonville has recovered 42,790 of those jobs as of 2014Q1 for a cumulative employment growth of 7.4% versus population growth over the same period of 4.1%. Most of the employment growth occurred in 2013. According to the U.S. Bureau of Labor Statistics as of the end of 2014Q1, the Jacksonville MSA unemployment rate was 6.1% versus the Florida rate of 6.3% and the national rate of 6.7%. The improving labor market has not yet resulted in a faster growing population, but it takes time for that information to be spread in the national economy.

Nonetheless, the improving employment picture has generated much improved household incomes. On the employment gains of 7.4% since 2009, household incomes have risen 12.0% as of 2014Q1. In addition to population growth, household incomes are an important driver because they determine the capacity of the population to form new households and to pay increasing rents. Historically household formations have exceeded the population growth rate, but during the Great Recession they declined only equaling population growth. Household formations again started pulling ahead of population growth in 2013 based on more confidence in jobs and growing household incomes, reflecting the pent-up demand for housing suppressed during the Great Recession. Households have increased 4.6% since 2009 on the 4.1% population increase.

So demand is strong, but not as strong as it might be. Will the demand continue and the potential be realized going forward? I think it will. Key to achieving that outcome will be continued employment growth and resulting household income improvements. The UNF Local Economic Indicator Project produces a Leading Economic Indicators Index for Jacksonville (Coldwell Banker Commercial Benchmark is a sponsor of LEIP Jax). That index stood at 115.13 as of 2014Q1, up from 110.21 as of 2012Q4 when employment gains really began in Jacksonville and 108.28 at 2009Q4 when the apartment market bottomed. The Jacksonville economy in 2014 should be conducive to rising household formation and therefore rising housing demand.

Supply and Absorption

Of course, demand must be examined in the context of supply (Figure 2). 

Figure 2

During 2013, 1,428 units were added to the Jacksonville apartment inventory. An additional 2,247 units are forecasted to be added during 2014. These may seem like large numbers, but for some perspective:

·         From 2010 to 2012 a total of only 1,202 units were added to inventory while there were 16,060 households formed; and

·         From 2010 to 2014 it is expected that a total of 4,877 units will be added to inventory in a growing economy, whereas in the preceding 5-year period of 2005 to 2009 7,923 units were added to a declining economy (the experience that I think creates the worries about oversupply).

Apartments are not the only product available to satisfy housing demand. Substitute products include, amongst others, home ownership and single-family home rentals. Apartment absorption satisfied almost half of the demand from new household formations in 2010; the intensifying foreclosure crisis combined with very difficult mortgage qualifications left apartment rentals as one of few housing alternatives then available. Jacksonville was hard hit by foreclosures, and that foreclosure crisis created single-family rental options into 2011 through 2013. At the same time home ownership became a more available option with relatively low home prices and very low interest rates. Those factors combined to push apartment absorption down to about a quarter of new household formations by 2013, a very low level by historical standards. Both of those circumstances are reversing in 2014. As the foreclosure crisis winds down, fewer foreclosed homes mean fewer conversions of single-family homes to rentals. Also, and more importantly, home ownership affordability is declining: the National Association of Realtors national First-Time Homebuyer Affordability Index declined from 129.7 for 2012 to 116.0 for 2013, and the National Association of Home Builders Housing Opportunity Index for Jacksonville declined from 85.2 at 2012Q4 to 79.0 at 2013Q4.

Oversupply should not have a major deleterious effect on the overall Jacksonville apartment market for the foreseeable future. Housing demand will continue to rise based on a growing Jacksonville economy. Housing product substitution will favor apartments. Even if the economy does not grow as rapidly as expected, any impact of slower household formation will be mitigated by the resulting necessity to rent apartments versus other housing alternatives.

The more interesting question is how the inventory increases will affect the various property classes and submarkets in Jacksonville. All of the inventory additions are Class A properties, and almost all are in the southeast quadrant of Jacksonville. We will address this question in my next post.

Operating Results

Demand and supply interact to produce the operating results in the market (Figure 3).

Figure 3

It is clear that demand exists for new apartment units. Vacancies in 2013Q4 were down 70 BPS from 2012Q4 even with the completion of 1,428 new units. None of the anticipated 2014 completions occurred in Q1and the 2014Q1 vacancy rate declined an additional 40 BPS from 2013Q4 to 6.3%. The vacancy rate has not been that low since the early 2000’s when condo conversions removed over 8,000 apartment units from the Jacksonville market. While I do not expect the vacancy rate to continue to decline with the new completions hitting the market, neither do I expect it will rise significantly because sufficient demand exists.

However some pressure on rents was seen in 2014Q1 with asking rents increasing by only 20 BPS and effective rents, by 30 BPS. Both asking and effective rent increases are down from 100 BPS increases in 2013Q4 and 120 BPS increases in 2013Q3. Average asking rents in Jacksonville were $847 per unit in 2014Q1, and effective rents were $816.

Jacksonville landlords have followed a strategy over the last five years of having rents follow incomes, as shown in Figure 3. The effect has been to significantly improve occupancy by maintaining affordable rents. This strategy also has the benefit of discouraging further new development if household incomes do not continue to increase as expected. To the extent that there are glitches in the employment and/or household income growth projections, I expect that any adverse consequences will be seen in rent growth rather than occupancy. Otherwise, rents should continue to grow in parallel to household income growth.

Conclusion

Overall, I give the Jacksonville apartment market a “buy” rating based on expected continued solid performance. How this overall expected solid performance plays out between property classes and submarkets is the subject matter of my next post, as mentioned earlier.

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

            Paul B. Hazlett
            Real Estate Investment Advisor
            Coldwell Banker Commercial - Benchmark
            904.421.8523
            PHazlett@CBCWorldwide.com

(Note: unless otherwise attributed, data in this report is from the REIS Jacksonville Apartment Report – 2014 Quarter 1. To see the full report, go to Market Intelligence/Apartments - CBC Benchmark. The REIS property statistics include market-rate rental properties in complexes of 40 or more units located in Duval and portions of Clay counties.)