Outlook Bright for Jax Apartments

(Carl Cronan is editor of Real EstateFlorida.)

JACKSONVILLE, FL-Strong growth projections are making this city a good bet for commercial real estate investors seeking value in rental apartment properties, according to multifamily brokers. At the same time, the inventory of new and existing units in the metropolitan area appears to be increasing.

Two garden-style apartment complexes are being brought to market totaling 560 units along Crossing Boulevard in the Orange Park submarket of Jacksonville. The class B properties, Mariners Wharf and Bridgewater at Wells Crossing, are expected to sell for $55 million or just above $98,000 per unit, either combined or separately, according to Jones Lang LaSalle Inc.

“Given the significant discount that the values represent in comparison to current replacement costs, both properties should be very appealing to a savvy investor,” says Jeff Morris, JLL managing director. Both complexes were built in the late 1980s and have a combined occupancy rate of 93%, he says.

A recent report by Walchle-Lear Multifamily Advisors states that apartment occupancy in Jacksonville has declined slightly over the past year, to 89% from 92%. Five new apartment complexes totaling just over 1,000 units have been completed so far this year, compared with 13 complexes with 3,200 units throughout 2007.

“Jacksonville’s strong population growth, formidable job creation and bright economic outlook will continue to encourage activity within the multifamily investment market,” the report stated. Walchle-Lear also records $143 million in apartment complex sales through the first half of this year.