Jacksonville’s Multifamily Sector Thrives with Major Sales Despite Cooling Rental Market

Jacksonville’s Multifamily Sector Sees Big Sales Amid Cooling Market

Despite a cooling rental market, Jacksonville’s multifamily sector has witnessed significant property transactions in 2024. The year has been challenging for this sector, with declining rental rates and occupancy levels affecting overall sales.

Jacksonville has seen a drop in rental prices, with a reported 11.3% decline year-over-year, as noted by Redfin in October. This decline contrasts with the national trend, which showed a modest rent increase of 0.6%. According to a study by MRI Real Estate Software, Jacksonville ranks second lowest among Sun Belt cities in rental growth, recording a decrease of 5.9% over the past year.

The decline in rent growth and occupancy rates is attributed to an oversupply of residential units that were built during the post-pandemic construction boom. These challenges have also led to a noticeable slowdown in property sales this year, as expressed by Franklin Street Multifamily Director Steven McAdoo.

Nevertheless, major sales continued to occur, particularly involving distressed properties, lender-forced sales, or smaller units. Multifamily sales made up four of the top ten real estate transactions this year, highlighting the ongoing investment interest in the area. Here are the top five multifamily sales recorded in 2024.

1. Avere Southside Quarter

Leading the list is the sale of Avere Southside Quarter, located at 7507 Park Village Drive. This apartment complex was purchased by Carter-Haston, a Nashville-based real estate investment firm, for $78.15 million on January 17. Built in 2022, the complex spans ten acres and contains six four-story buildings, with a per-unit sales price of $242,702. At the time of sale, the property was over 90% leased.

2. River House

Next up is the Broadstone River House, an apartment complex situated on the Southbank at 1655 Prudential Drive. This property sold for $54 million on June 28 to Block One Ventures LLC. The company plans to rebrand and renovate the 263-unit complex, originally built in 2018, starting construction later this summer. Previous renovations amounting to $11 million were undertaken by the prior owner following seawall issues in 2020.

3. Brookwood Club Apartments

Purchased by Brookfield Properties, the Brookwood Club Apartments at 1385 Brookwood Forest Blvd. sold for $54.2 million on May 17. This property, encompassing 14.3 acres, was acquired from Starwood Property Trust. Brookfield Properties is a globally recognized firm with diverse property holdings.

4. The Meridian Apartments

Duncan Hillsley Capital, based in Boca Raton, bought The Meridian Apartments located at 653 Monument Road for $51.5 million on February 5. This 360-unit property in Arlington was developed in 1987, occupying nearly 20 acres.

5. Westwood Apartments

Lastly, the Jacksonville Housing Authority successfully acquired the Westwood Apartments on February 17 for $35.85 million. Following a recent bond sale that raised $41 million, the authority plans renovations for the 256-unit property located at 1171 S. Lane Ave. The plan includes that approximately 82% of the units will be reserved for individuals or families earning less than 80% of the average median income in Jacksonville.

Even in an environment marked by significant challenges for the multifamily sector, these transactions indicate ongoing investor confidence in Jacksonville’s real estate market.