Market Review: Jacksonville, Florida

Summary of Jacksonville’s market attractiveness:

Large land space provides many real estate opportunities
Attractions include Jacksonville Jaguars, Florida Theater, Jacksonville Zoo and Beaches
Strong and diverse job market-Strong rent growth and declining vacancies trend
Large developments in process in downtown and surrounding areas

In this market review, I share some interesting insights on a market that is very special to me since it happens to be my hometown: Jacksonville, FL. Jacksonville is a unique city for a few reasons. First, it is the largest city nationwide from a land area perspective. This makes for a larger land space of real estate investment opportunities. Secondly, Jacksonville has much job diversity. With two naval bases, NAS Jax and Mayport, there is a strong military employment alongside professional and construction jobs.

Population

Jacksonville is home to over 911,000 people, and in the last two decades has experienced greater 20% growth. With access to beaches and Interstate 95 that takes commuters down Florida as well as easily into Georgia and northward, Jacksonville‘s location is attractive to many people looking to permanently settle in Florida.For the Jacksonville City Metropolitan Statistical Area (MSA), population continues to rise. Today’s 2020 estimate of 978,000 people is an increase of 6% from five years ago. The median age is 36 and the 12% 25-34 age range is the second highest percentage of the population behind the 5-17 age group (nearly 16%). This remains a relatively young city compared to the 24% over 65 in Brevard County, which I first reviewed in August 2020.

Employment

Prior to COVID, Jacksonville’s 3% unemployment was reduced by 50% from five years prior. Today still, during the COVID pandemic, Jacksonville’s 8% unemployment is still lower than its post Great Recession 2010 level of 10-11% and than the Florida average of 8.8%.
Jacksonville has a strong military presence. In fact, two of its Top 3 employers is the Navy.

Naval Air Station Jacksonville – 22,000 employees
Duval County Public Schools – 14,500 employees
Naval Air Station Mayport – 12,000 employees

While the Navy remains the top employer, Jacksonville is uniquely home to many businesses and industries ranging from health, finance and banking and education:

Government: The City of Jacksonville is the city’s fourth largest employer, providing jobs to 8,820 people. Next is the Sherrif’s Office, which employs, 3,300.

Education: Duval County Schools is the second largest employer and employs 14,500 Jacksonville residents. Other industry employers include University of North Florida, Florida State College at Jacksonville, St. John’s County School District and Putnam County School Board. These account for over 8,500 jobs.

Health: Jacksonville has many hospitals. To name a few, the Mayo Clinic, St. Vincent’s Medical Center, Shands Jacksonville Medical Center make for a combined 12,500 jobs. Also in the health industry are companies such Baptist Health and Blue Cross and Blue Shield which combined to account for over 14,000 jobs.

Baptist Health - Downtown Jax - Employs over 8,000 people — Baptist Health – Downtown Jax – Employs over 8,000 people

Finance/Banking: The finance industry also is well represented in Jacksonville with companies such as Bank of America, Citi Bank, JP Morgan Chase, Wells Fargo making up Over 17,000 jobs.This is only scratching the surface of employment and job diversity. There are professional services companies such as Vistakon, an Optics Manufacturer, and CSX, the railroad company headquartered in Jacksonville that add to the job diversity

Housing and Development

The average rent in Jacksonville is $1,283, an increase 23% from five years ago. Vacancy is currently 6.21% an 18% reduction from 5 years ago. Both metrics reflect the increasing population and growing demand for housing in Jacksonville.

Many large development projects are underway in the city, and while COVID has called for delays and halts of certain projects, many plans remain to grow and revitalize the historic city:

Jaguars considering build of $500M Lot J and $2.5B Shipyard Near TIAA Bank Field – consisting of Live Arena entertainment venue, a 200-unit boutique hotel and 700 residential units.
$15M redevelopment of Downtown’s Ambassador Hotel – a six-story historic landmark built in 1922- Talks of Phase 4 expansion plans of the upscale St. John’s Town Center- Southbank development of 8-story, 185 unit apartment complex- Plans in place for $19M renovation of downtown’s Independent Life building

Downtown view of Independent Life Building

Other Facts

Other than its attractive location and many job opportunities, further incentives and attractions for future residents include a long list of attractions:- National Football League’s Jacksonville Jaguars – Jacksonville Zoo- Many Beaches- Florida Theatre- Museum of Science and History- Times Union Center for the Performing Arts
According to the City of Jacksonville website, below are just a few recent accolades of the many that the city holds:

No. 12 “2019’s Best Large Cities to Start a Business” (Wallet Hub – 2019)
No. 12 “2019’s Best Large Cities to Start a Business” (Wallet Hub – 2019)
Among “The 15 best cities in the U.S. to find tech talent” (Forrester Research Inc. – 2018)
“The 10 Best Big Cities to Live in Right Now” (Money Magazine – 2018)
No. 5 “Most Popular Cities to Which Millennials are Moving” (SmartAsset – 2018)

Conclusion

While Jacksonville is a growing area that supports many jobs and great investment opportunities, like any large city, it also has pockets that prone to violent crime. Any investor should be very diligent to to understand the intricacies of the city and many neighborhoods within to ensure solid understanding of associated crime rates in those sub areas.What makes Jacksonville attractive for real estate investment is its large geographic land area and diverse employment base. The land area allows for many possible deals in the city and the diverse employment. While this MSA will allows for more investment opportunities than my other focus market, Brevard County, the competition is greater which may be a challenge to securing a deal at the right price. Altogether, Jacksonville rates strong for producing jobs in many varieties, creating less risk to investors in the market, as the strength of the workforce is not reliant upon any one company or industry.

References and Resources
Census.govhttps://www.coj.net/https://www.jaxdailyrecord.com/article/jacksonvilles-top-employershttps://www.deptofnumbers.com/rent/florida/jacksonville/https://www.rentjungle.com/average-rent-in-jacksonville-fl-rent-trends/

Passive Investor Startup Guide

To find out more about what it looks like to invest as a passive investor in multifamily real estate, download our free Passive Investor Startup Guide here!