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Aug 24
2010
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While Improving, Jacksonville Remains a Challenged Apartment Market
Posted by: Michael Cunningham on Aug 24, 2010 13:52 Tagged in: Rent , Occupancy , Multifamily , Construction , Blogs , Apartment Development , Apartment
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Just like pretty much every other metro across the country, Jacksonville has seen its apartment market generate some performance momentum so far during 2010. However, this locale took one of the nation's worst beatings during the down portion of the market cycle, so it remains far from reaching healthy status once again.
Apartment absorption in Jacksonville registered at some 2,900 units during 2010's initial six months, far surpassing completions limited to around 500 apartments. Occupancy, then, has made big strides, rising 3 full percentage points since late 2009. Even with that upturn, however, the June occupancy figure was only 89.3 percent. That's the third worst reading across the 64 metros that form the core of MPF Research's national apartment analysis, coming in just ahead of the rates in Houston and Fort Myers.
With overall occupancy so low, it's not surprising that even the top-performing neighborhoods and product niches are struggling. The metro's best neighborhood-level result in submarkets with sizable apartment inventories is the 92.8 percent occupancy in the Mandarin area. Across the various product categories, 1990s-era properties are doing the best with occupancy at 92.5 percent.
Apartment operators in Jacksonville actually raised effective rents by a significant 2.7 percent during 2010's 2nd quarter, measuring change on a same-store basis. That's an aggressive move for a place with occupancy still so low. But even with that quarterly bump, rents haven't made much progress in making up the ground lost previously. From peak to trough in this market, effective pricing declined about 13 percent.
Further meaningful process seems likely to lie ahead for Jacksonville's apartment market, but this is one that's going to need quite a while to achieve complete recovery.
Note: Portions of data collected were collated utilizing property management software, and various city, county, and state records.
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