SOUTHEAST SNAPSHOT, OCTOBER 2004

Jackson Multifamily Market

Blake Pera Vice President CB Richard Ellis

Jackson, Mississippi, like many other Southeast markets, is seeing a rising trend in multifamily development in the form of mid-sized tax credit properties. “A lack of available land in upscale suburbs has tempered high-end construction,” says Blake Pera, vice president of CB Richard Ellis’ Memphis, Tennessee, office.

Two significant tax credit properties have recently completed construction and begun leasing in Jackson. Highland Park, a 152-unit complex, is located in north central Jackson just off Interstate 55. The 84-unit Park Springs is located in the Clinton submarket of Jackson. Park Development of Jackson developed both properties.

Recent market rate properties that have completed construction include The Gables, with 168 Class A units in Ridgeland, and Bridgewater, with 224 Class A units in Brandon. Heritage Properties of Madison, Mississippi, developed these communities.

Two tax credit properties totaling 328 units, one in southwest Jackson and one in the Pearl/Richland area, are under construction should be completed later this year. Additionally, a market rate property in northeast Jackson totaling 248 units also will be completed by year’s end.

With the new Nissan manufacturing facility just north of Jackson, it seems probable that the majority of development would be in north central or northeast Jackson. “Although there is development in these areas,” says Pera, “developers seem to be banking on the solid growth of the entire market for the future strength of the area, as they branch out into nearly every submarket of Jackson.”

The overall average rental rate in Jackson is $593 per unit, a 3 percent annualized increase over the year-end 2003 rents. Rates range from an average low of $508 per unit for older properties, to $621 per unit for properties constructed in the 1980s, to an average high of $718 per unit for new construction properties. The vacancy rate is holding steady at slightly more than 7 percent.

Downtown areas in many second- and third-tier cities have a common bond in the redevelopment of their inner city and the development of new housing units in areas that, in the past, have been predominately industrial. “Many cities, such as Memphis, Nashville and Little Rock, cannot develop fast enough to keep up with the in-migration trend, which is resulting in some of the highest rents in these markets,” says Pera.

Downtown Jackson’s residential revitalization is slowly beginning to take shape. “Recent efforts to clean up the area, including the condemnation of a number of dilapidated buildings, a new downtown police substation and a designated economic redevelopment area, may breathe life into an area rich in heritage,” says Pera. “Downtown Jackson has the potential to become a hotbed for commercial and residential development.”

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