In this market review, I analyze Brevard County in Florida. Brevard county consists of several cities, such as Cocoa, Titusville, Palm Bay and Melbourne, with Melbourne and Palm Bay being the areas of growth in population. The 321 area code was assigned to it for its association with the Space Program (3-2-1-Liftoff) headquartered in Cape Canaveral Florida.
Below I summarize my market review of this Metropolitan Statistical Area (MSA) and explain why I am attracted to this market for multifamily opportunities.
Population
Over the last five years, the population has grown by 6% from 565,000 to 601,000 people. Many new residents are entering from colder, northern states to permanently escape the climate and retire. This helps explain the high proportion of 24% of the population that is older than 65. Although Brevard county is home to older Americans, the trend of a larger population of younger, working age professionals is already beginning to emerge.
Employment
Brevard County’s largest employers are located in Melbourne-Palm Bay Area. L3 Harris Technologies (formerly Harris Communications) is the product of a recent merger that brings talent from all over the nation to L3 Harris’ Melbourne and Palm Bay Campuses. Home to nearly 7,000 employees, L3 Harris is the largest private employer of jobs. Second and third in employment is Health First and Northrop Grumman, respectively. The latter, another Aerospace and Defense contractor, in 2013 named its Melbourne Facility as its Manned Aircraft Design Center of Excellence, kicking off new programs and opening up new jobs, attracting relocated employees from California, Texas, Virginia and other areas.
Pre-covid, 2019 unemployment was 3.2%, a sharp reduction from its 11% and lower than the national average of 3.6%. My assessment is that the relatively low unemployment trend continues into the future. Melbourne is becoming the hub of cutting-edge aerospace technology, and Aerion Supersonic is a great example. The supersonic Jet company is extending its footprint in Melbourne, Florida to build a $300 million dollar jet, on par to create 675 jobs in the area.
Housing
As a result of the migration to this warm coastal area, multiple employer expansion and the associated relocation of families for job opportunities, Brevard County has expanded its housing supply. 2019’s new permits of 4,200 is the highest over the previous 5 years.Being in the path to progress, demand for housing continues to rise with the need to support the growth. I have seen a few brand new multifamily developments in Melbourne and Palm Bay, attracting the growing working professional base in the area. Class A developments remain on the rise, and there is further opportunity to acquire the existing value-add Class C apartments within these growing areas of interest.
Conclusion
Once a hot area for space, Brevard County’s revitalized growth, specifically Melbourne and Palm Bay, is driven by migration to the coastal climate, Aerospace and Defense and growing families. I am keeping close eye on both on and off-market opportunities for class C apartments in key areas areas of interest for buy opportunities.
