MULTI-HOUSING NEWSLETTER

NORTH FLORIDA
FALL
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MULTI-HOUSING NEWSLETTER
M U LT I - H O U S I N G G R O U P
J AC K S O N V I L L E , F LO R I DA
CBRE JACKSONVILLE
MULTI-HOUSING GROUP EXPANDS:
• Brian Moulder joins the CBRE Multi-Housing Group as a Senior Vice President, partnering with
Vice Chairman Dan Allen and Dhaval Patel
• Dhaval Patel has recently been promoted to Director of Operations
• Robyn Gallup joins the team as a Client Services Specialist
• Beth Johnson joins the team as a Client Services Coordinator
• David Moran has recently been promoted to Marketing Coordinator
• Elizabeth Pippin joins CBRE Research as a Research Coordinator
Jacksonville’s multi-housing group has brokered over 3.5 billion dollars in total transaction volume since 2003.
2011’s SIGNIFICANT NORTH FLORIDA TRANSACTIONS SOLD BY CBRE
1 TATTERSALL AT
TAPESTRY PARK
Jacksonville, Florida
$42.8 million/$153,405
June 2011
3 4 MARTA
2
Jacksonville, Florida
$24.1 million/$120,500
May 2011
4
PLANTATION BAY
Jacksonville, Florida
$17.1 million/$71,250
May 2011
7 EAGLES POINTE
Jacksonville, Florida
$3.8 million/$20,430
April 2011
MARCUS POINTE
Pensacola, Florida
$16.3 million/$65,911
May 2011
Gainesville, Florida
$18.7 million/$91,666
May 2011
5 VINTAGE AT
ATLANTIC CROSSING
6
SILVER SPRINGS
Jacksonville, Florida
$24.6 million/$57,060
May 2011
8
WELLINGTON PLACE
Orange Park, Florida
$20 million/$55,866
April 2011
JACKSONVILLE MSA - 2011 TRANSACTIONS - GREATER THAN $3 MILLION
PROPERTY
NAME
DATE
SOLD
YEAR
BUILT
NUMBER OF
UNITS
PRICE /
UNIT
1
GARDENS AT BRIDGEHAMPTON
(BULK CONDO)
Oct 2011
2006
107
$56,542
2
FALCON LAKE
Oct 2011
2008
440
$75,909
3
OAKS AT MILL CREEK
Sept 2011
1987
360
$47,759
4
HUNTINGTON AT HIDDEN HILLS
Sept 2011
1987
224
$86,280
5
TATTERSALL AT TAPESTRY PARK
June 2011
2009
279
$153,405
6
HUNTERS WAY
May 2011
1975
200
$58,500
7
SILVER SPRINGS
May 2011
1985
432
$57,060
8
WELLINGTON PLACE
May 2011
1987
358
$55,866
9
ATLANTIC CROSSING
May 2011
2008
200
$120,500
10
VINTAGE AT PLANTATION BAY
April 2011
2001
240
$71,250
11
EAGLES POINTE
April 2011
1972
186
$40,430
12
BELLA TERRAZA (BULK CONDO)
March 2011
1971
197
$31,218
13
CLUB AT CHARTER POINT
March 2011
1975
258
$17,054
14
CROSS CREEK
March 2011
1972
292
$18,493
15
WOODS OF MANDARIN
March 2011
1974
401
$19,077
16
CITY RIDGE
March 2011
1972
288
$21,267
Source: Real Capital Analytics
$116,829
$125,000
$125,000
$115,000
$115,000
All Other Firms
$98,068,333
37%
$105 000
$105,000
$105,000
CBRE Transactions
$165,595,367
63%
$95,000
$95,000
$85,000
$85,000
$72,121
$75,000
$75,000
$57,060
$65,000
$65,000
$55,000
$55,000
$45,000
$45,000
$29,368
$35,000
$35,000
$25,000
$25,000
Built > 2000
Built < 1999
CBRE Transactions
All Other Firms
NORTH
FLORIDA’S
HE
ST
CLASS
: : Brian Moulder
P: 904.633.2609
E: brian.moulder@cbre.com
H IG
BROKER CONTACTS
A OF 2011
‘S
: : Dhaval Patel
P: 904.630.6369
E: dhaval.patel@cbre.com
Property:
TATTERSALL AT TAPESTRY PARK
Location:
Jacksonville, FL
:: Dan Allen
P: 904.630.6362
E: dan.allen@cbre.com
Date Sold:
June 2011
Year Built:
2009
Total Units:
279
CBRE | Licensed Real Estate Broker
Broker:
CBRE Jacksonville
SUPPORT TEAM
Price/PPU/PSF: $42.8 M/$153,405/$139
* New market record for an income property in Jacksonville FL.
: : Robyn Gallup
P: 904.633.2617
E: robyn.gallup@cbre.com
: : Beth Johnson
P: 904.630.6360
E: beth.johnson@cbre.com
: : David Moran
P: 904.630.6396
E: david.moran@cbre.com
: : Elizabeth Pippin
P: 904.630.6382
E: elizabeth.pippin@cbre.com
Name:
ATLANTIC CROSSING
Location:
Jacksonville, FL
Price/PPU/PSF:
$24.1 M/$120,500/$97
Date Sold:
April 2011
Year Built:
2008
Total Units:
200
Broker:
CBRE Jacksonville
* First transaction above $100,000 per unit since fourth quarter 2007.
POPULATION AND EMPLOYMENT GROWTH RANKS
AMONG 51 LARGEST METROS 2010 - 2015
POPULATION
RANK METRO
JACKSONVILLE OFFICE
225 Water Street, Suite 110
Jacksonville, FL 32202
www.cbre.com/mhgjacksonville
EMPLOYMENT
ANNUAL
GROWTH
ANNUAL
GROWTH
RANK METRO
1 Phoenix, AZ
2.7%
1 Austin, TX
2.6%
2 Austin, TX
2.7%
2 Houston, TX
3.2%
3 Las Vegas, NV
2.6%
3 Dallas, TX
3.2%
4 West Palm Beach, FL
2.5%
4 Atlanta, GA
3.1%
5 Orlando, FL
2.3%
5 Fort Worth, TX
3.1%
6 Atlanta, GA
2.2%
6 San Antonio, TX
3.1%
7 Charlotte, NC
2.2%
7 Las Vegas, NV
3.0%
8 Dallas, TX
2.1%
8 Orlando, FL
2.8%
9 Fort Worth, TX
2.1%
9 Charlotte, NC
2.5%
10 San Antonio, TX
2.1%
10 Jacksonville, FL
2.4%
11 Houston, TX
2.0%
11 Phoenix, AZ
2.4%
12 Portland, OR
1.8%
12 Portland, OR
2.4%
13 Sacramento, CA
1.5%
13 West Palm Beach, FL
2.3%
14 Jacksonville, FL
1.4%
14 Minneapolis, MN
2.3%
15 Fort Lauderdale, FL
1.4%
15 Nashville, TN
2.3%
Source: Economy.com
NORTH FLORIDA ECONOMIC OUTLOOK
• Jacksonville has gone from the weakest large economy in
Florida to the strongest earlier this year. As in most Florida
metro areas, travel and tourism are creating the most jobs,
followed not too distantly by healthcare. But a resurgence in
construction payrolls has been instrumental to the metro area’s
revival. Stronger hiring is chipping away at the unemployment
rate, which has fallen by more than the state’s.
• The metro area has comparative advantages that position
it to gain from growth in international trade, which is expected
to remain strong in the second half of the year. While military
bases form the foundation of the economy, trade, transportation
and logistics provide the avenues for growth. A new terminal at
JAXPort will create 200 jobs, and Pittsburgh-based PLS Logistics
announced it will relocate to Jacksonville, citing the area’s
growing port operations and proximity to three major highways
and three railroads.
• Jacksonville’s housing market will stabilize sooner than in
almost every other Florida metro area. In addition, the metro
area’s foreclosure problem is not as severe as elsewhere in the
state, mitigating a source of house price declines.
• Jacksonville will recover faster than the nation, buoyed by
goods-producing industries and trade. Service industry expansion
will ensure that the metro area’s recovery is broad-based. In the
long term, a strong presence of defense contractors, its growing
prominence as an international port, and robust demographic
trends ensure that Jacksonville will be an above-average
performer.
• Sales and new building will be boosted by the economic
stability provided by the metro area’s military bases and an
accelerating pace of job creation, enabling construction payrolls
to expand robustly. Construction employment is expected to rise
9% next year, more than in any other industry.
MULTI-FAMILY OUTLOOK
• 2011 year-to-date transaction volume for the North Florida
market is over $260 million, with CBRE controlling over 60% of
those deals. *
• Cap rates have varied greatly depending on location, but
recent sales indicate:
• Class A properties have traded in the 5.5% – 5.75% range
• Class B properties from 6.25% – 7.0%
• Class C properties over 7.0%
• Similar to other markets, cap rates declined on a macro
level this year, with major compression for value add deals
and higher quality assets located in the Southern submarkets in
Jacksonville.
• After a long absence, REIT’s are once again the most active
buyer for A products, with private capital groups being the most
active buyers outside of the A market.
• Short sales, note sales, and foreclosure
approximately 85% of the year’s transactions.
made
up
• Quality trophy A products are starting to trade again in
our market, such as Tattersall at Tapestry Park and Atlantic
Crossing. Even though there have been some distressed sales,
it is important to note the quality of assets traded this year
compared to the previous two years.
• Improving fundamentals, positive job growth, demographic
shifts and a constricted pipeline for 2012 and 2013 should
further increase investor interest level in both stabilized and
distressed properties.
• Fundamentals are improving and the prognosis for the next
5 years is very strong, with increasing rents and vacancy rates
steadily declining. By 2016, MPF is forecasting a vacancy rate
below 6.5% with a combined positive rent growth close to 15%.
• The Jacksonville apartment market continues its strong
positive trend. For the first time in the past three years, the
average market vacancy factor is less than 10%, with 4 out of the
7 submarkets posting less than 8% vacancy.
• Concessions are burning off throughout the market, with a
majority of the submarkets offering a minimal amount – mainly
aging inventory. This is a significant improvement over this time
last year, during which a concession of 1-2 months was common.
• Rent growth that was present only in select submarkets is
now more prevalent. Evidence of that trend has been clear
in recent underwriting, as the most recent months generally
demonstrate the best performance across the board.
• The vacancy rate in the Jacksonville apartment market
continues to improve reaching 10.3% as of June, down from a
high of 16% two-and-a-half years ago. There are still a number
of communities in receivership and foreclosure, which is keeping
the vacancy rate at a higher level.
• Same-store rents posted their first significant improvement
in four years, rising 1.6%, or $12.36. This helped the average
rent improve to $765. Nearly half of all communities are still
offering some type of concession.
• Northern submarkets - where there is older product stock continue to lag the market in occupancy, rent and concessions
but are nonetheless seeing positive trends.
• CBRE is currently marketing a Class A property in the Southeast
quadrant which achieved $1.15 / SF on their last 90 leases. This
type of consistent rent growth has not been seen since 2007,
when A properties were achieving $1.25 to $1.30 per sq. ft.
• Buyers are still on the hunt for Class A and well-located B
properties with a value-add component, according to our recent
marketing efforts.
*Sources: Real Data - AptIndex; Economy.com; Real Capital Analytics - Transactions greater than $3 million.
JACKSONVILLE FORECAST 2011 - 2016
Year
Total Employment
(x 1000)
Vacancy
Rate %
Rate Index
Per Unit
Rent
Inflation %
2011
588
9.8
$745.73
0.5
2012
603
8.8
$756.08
1.4
2013
620
7.8
$779.35
3.1
2014
633
7.1
$805.04
3.3
2015
644
6.7
$832.52
3.4
2016
655
6.5
$861.52
3.5
Source: MPF Research, CBRE, Inc.
• Total employment is projected to increase
by approx. 72,600 jobs during the 2011 2016 period in the Jacksonville MSA.
• Net absorption is expected to outpace new
supply, with an expected average of 260
units and net absorption of 816 units.
• Vacancy rates are expected to improve to
6.5%, while rents are forecasted to rise to
$861.52.
JACKSONVILLE HOT TOPICS
Jacksonville Will Recover Better than Most of Florida
Northeast Florida Businesses Planning for Growth
(Jacksonville Business Journal, Nov 2011)
(JAXUSA Partnership Newsletter, October 2011)
•
•
52% of surveyed businesses said that their company expects to
increase jobs in Northeast Florida and 27% said that they will
increase capital investment here.
•
The JAXUSA Partnership has helped create 3,000 new jobs in the
Jacksonville MSA.
UCF Institute for Economic Competitiveness expects Jacksonville
to fare better in its economic recovery than most of the rest of the
state over the next three years.
Florida Economy Will Grow Faster than the Southeast
(Miami Herald, Nov 2011)
•
The Federal Reserve’s state-by-state economic index sees Florida
continuing to grow at a quicker pace than the rest of the Southeast.
JAXPort Could Bring 100,000 Jobs to Jacksonville
Convergys Corp. Announces 900 New Jobs in Southside
(Jacksonville Business Journal, August 2011)
•
(Jacksonville Business Journal, August 2011)
•
Hanjin (Korea) signed a 30-year lease to build a $300 million
container facility expected to open in 2016 which is projected to
bring over $1 billion in economic impact.
JP Morgan Chase Expanding - Adding 250 New Jobs
•
SAFT Batteries Opens the “Factory of the Future” at Cecil
Commerce Center
(First Coast News, September 2011)
•
(Jacksonville Business Journal, September 2011)
These full-time jobs will be in Chase’s home lending operations
group with an average wage of $53,000 if it receives incentives.
Convergys Corp. said it will hire 900 customer service and sales
positions at its call center. The jobs are permanent positions, to
support a client in the telecommunications industry.
SAFT Batteries, the world’s leading designer, developer and
manufacturer of high-tech industrial and defense applications,
opened the “Factory of the Future” in September. The opening of
SAFT brings 300 new jobs to the Westside market.
JACKSONVILLE MSA TOP EMPLOYERS
Company
Name
Naval Air Station Jacksonville
Duval County Public Schools
Naval Station Mayport
City of Jacksonville
Baptist Health
Bank of America Merrill Lynch
Blue Cross Blue Shield
Citi
Mayo Clinic
United Parcel Service
Number of
Employees
25,240
14,480
12,670
8,820
8,270
6.400
6,000
5,000
4,970
4,100
Sources: JAXUSA Partnership, Jacksonville Regional Chamber of Commerce
Company
Name
Clay County School Board
St. Vincent’s Medical Center
U.S. Postal Service
Shands Jacksonville Medical Center
St. Johns County School District
Jacksonville Sheriff’s Office
CSX
J P Morgan Chase
Fleet Readiness Center
Wells Fargo
Number
of
Employees
4,000
4,000
3,790
3,500
3.440
3,300
3,300
3,200
3,200
2,800
JACKSONVILLE MSA
JAX
AIRPORT
1
95
NORTH
295
Marine
Terminals
17
Mayport
Station
295
CENTRAL
ARLINGTON
90
10
10
SOUTH
WEST
SOUTHEAST
90
BEACHES
9A
Cecil
Field
BAYMEADOWS
295
MANDARIN
ORANGE PARK
APARTMENT MARKET STATISTICS
1
Inventory
(Units)
A17
verage
SF
Asking
Rent
Avg. Rent/
SF
Average
Vacancy
Arlington
9,651
954
$662
$0.69
15.6%
Baymeadows
9,081
1,002
$851
$0.85
5.6%
Beaches
2,424
894
$771
$0.86
6.1%
Central
1,119
963
$888
$0.92
6.2%
Mandarin
6,847
926
$750
$0.81
9.7%
North
3,857
971
$721
$0.74
12.6%
Orange Park
4,846
1,019
$775
$0.76
6.1%
South
8,428
902
$722
$0.80
12.3%
Southeast
9,908
1,032
$921
$0.89
7.8%
St. Augustine
1,115
946
$770
$0.81
6.4%
West
8,941
956
$666
$0.69
14.2%
66,217
967
$765
$0.79
10.3%
Submarket
Totals/Averages
95
Source: Real Data - AptIndex, July 2011
ST. AUGUSTINE
2011
SAMPLE
OFFERINGS
MATHEWS CROSSING
• Jacksonville, FL
• 1972 / 1,103 units
• www.cbremarketplace.com/
mathewscrossingapts
FLORIDA CLUB
• Jacksonville, FL
• 2008 / 180 units
• www.cbremarketplace.com/
floridaclub
SPRINGS AT EFFINGHAM
• Savannah, GA
• 2008 / 352 units
• www.cbremarketplace.com/
springsateffingham
ISLAND CLUB
• Jacksonville, FL
• 2008 / 244 units
CBRE
NORTH FLORIDA
MULTI-HOUSING GROUP
• Lender-driven sale
• Distressed asset offered significantly below
current debt level
• Offers easy access to the Jacksonville International Airport, Jacksonville University, Baptist Hospital, University of North Florida, and
over 170 upscale retailers and restaurants
• Boutique asset
• Submarket has the highest rents in the MSA
• Broad, high-end amenity package
• Located in Jacksonville’s most desirable
submarket
• Strongest growth area in the MSA
• Stable, cash-flowing asset
• “Concierge” units provide proven upside
potential
• High-quality construction
• Lender-Owned
• Significantly below replacement cost
• Superior to submarket competition
• www.cbremarketplace.com/
islandclub
HARBORTOWN PENINSULA
• Jacksonville, FL
• 12.75± Acres / Up to 520 units
• www.cbremarketplace.com/
harbortown
• Intracoastal Waterway land adjacent to
marina
• The property’s high-visibility waterfront
location presents an excellent opportunity for
a unique multifamily development
© 2011 CBRE, Inc. The information above has been obtained from sources believed reliable. While we do not doubt its accuracy, we have not verified it and make no
guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness.