The influx of newcomers to Volusia and Flagler counties is not only creating a need for more new homes.
It’s also creating increased demand for apartments.
And investors and developers have taken notice.
“Daytona Beach was one of the top rent growth markets in the country last year,” observes Michael Donaldson, senior vice president of investments for the commercial real estate brokerage Marcus & Millichap in Tampa.
The average rental rate for apartment units in Daytona Beach is just over $1,000 a month, a 5 percent increase compared to a year ago, according to Donaldson, who oversees his firm’s national multi-housing group.
The national average rental rate has increased 4 percent in the past year, he said.
The average occupancy rate for apartments locally has also risen to 96.4 percent, exceeding the state and national averages of 95.5 percent and 95.4 percent respectively, according to Donaldson.
“Developers are typically attracted to strong demographic trends and employment growth,” said Donaldson, noting the growth in apartment developments throughout Central Florida, especially in the bigger cities.
As the cost of building new apartment communities in Orlando and Tampa rises, “developers are migrating to secondary locations such as Daytona Beach as they can typically acquire land for much cheaper and there is less competition,” he said.
New commercial developments locally such as the One Daytona entertainment/retail/dining complex across from Daytona International Speedway and the Tanger Outlets and Tomoka Town Center malls next to the Interstate 95/LPGA Boulevard interchange are also spurring the increase in apartment projects here, according to McDonald.
Apartments under construction in Volusia County include the 276-unit Tomoka Pointe apartments rising up behind Tomoka Town Center in Daytona Beach, and in New Smyrna Beach, the 264-unit Messina by the Lake apartments in the Venetian Bay community.
Those projects are just the start of a surge in new apartment developments throughout Volusia and Flagler counties.
In Daytona Beach, multifamily housing projects in the works include developer Unicorp’s plans to build 340 apartment units as part of its Tomoka Village development just north of LPGA Boulevard, between Williamson and Clyde Morris boulevards, Indigo Development’s plans for the 301-unit East LPGA Apartments complex along LPGA Boulevard, east of Clyde Morris Boulevard, developer Next Chapter’s proposed 210-unit Dunn Avenue apartments on Halifax Health-owned land next to Volusia Mall, and Prime Group’s plans to build 276 apartment units on the east side of One Daytona.
In addition, Consolidated-Tomoka Land Co. recently acquired much of the downtown Daytona Beach block where the old First Baptist Church is located with plans for a mixed-use project that will include apartments.
The impetus for Consolidated-Tomoka’s project is national insurance giant Brown & Brown Inc.’s future headquarters campus two blocks away on North Beach Street.
The 11-story office building is expected to bring hundreds of white-collar professionals to downtown Daytona Beach when it opens in late 2020.