When looking at the Florida real estate market, many eyes drift to the southern part of the state. NAI Hallmark managing partners Keith Goldfaden and Christian Harden say there’s another “fast-growing, dynamic city that’s become a hotbed for real estate investment” due to a business-friendly environment, skilled employee base, strategic location for logistics, and—what can be a rarity these days—available land, and it’s in the north. It’s Jacksonville.
“Our investment sales teams are seeing strong investment demand across the board,” Goldfaden adds. Across all property types, transaction volume for the first quarter of 2022 was up 57% year over year.
“Industrial rental rates have doubled in many submarkets over the last several years,” Harden says. “Ongoing supply chain challenges and insatiable consumer demand have elevated the city’s position as a regional hub, within a day’s drive from the Orlando, Miami, Tampa and Atlanta markets.”
Fueling everything is population migration to the Sun Belt. People come for a job and then stay, maybe taking another job or starting a business or relocating one. “If you look at the last five years, investment sales and leasing velocity has increased more significantly than any other point Jacksonville’s history,” says Harden. “We’ve never seen as much new to market investment and business expansion focused on Northeast Florida we do today.”
The investor universe has grown, as “In 2021 over 25% of all the transactions that took place in Jacksonville were investors purchasing in Jacksonville for the first time,” according to Goldfaden. The city has become a more institutional market.
One reason: land availability, with 874 square miles under a single jurisdiction. “If you look at the map, there’s ample land for growth of industrial and residential around the outer beltway,” Harden says. Price points for existing assets are below replacement cost and land prices are lower than in Tampa or Orlando, along with more attractive cap rates.
NAI Hallmark isn’t just a broker, but a believer. The firm took offices in a downtown building it was co-developing. “We are nearby dozens of restaurants and other amenities, including the Riverwalk that our employees can enjoy each day,” Harden says. “There’s a civic responsibility component for us as well. We know great cities don’t exist without a thriving downtown, so we wanted to put our money where our mouth is.”
Rapid growth and development can raise questions about public acceptance. “I think the citizens of Jacksonville are welcoming growth with open arms and want to be seen as a sophisticated community,” says Harden. At the same time, they expect responsible development.
While there are many opportunities in the area, Jacksonville is still close community, and even “business-friendly” has nuance. “We think it’s important to partner with a company that knows what the community is about,” says Goldfaden.