The Orlando real estate market is bustling with life, population growth, jobs, and a strong retail environment. We’ve heard so much about the demise of brick-and-mortar stores, but it seems that Orlando is bucking that trend as a major Central Florida shopping destination.
A retail market report from real estate firm Marcus & Millichap shows the vacancy rate for shopping centers will “drop” to just 4.6% this year. It was 5.3% last year. That report also predicts that retail rents will be rising. They average about $16.77 a square foot per year, according to the Orlando Sentinel.
There’s also plenty of new retail construction. Nicholas Ledvora of Marcus & Millichap said in the Sentinel, “I’m seeing a ton of construction.” He says, “Maybe not as many of the big projects, but a lot from the smaller developer end.” He says that while some of the bigger names are struggling, like Macy’s, there’s a big demand for space from smaller operators like grocery stores, dental offices, and salons.
The Sentinel writes that Orlando will get a total of 900,000 square feet of new retail space this year. Two of the larger retail projects include a giant Wal-Mart and a 70,000-square foot shopping plaza.
According to Marcus & Millichap, “Retail follows rooftops in Orlando.” It said in its Retail Investment Forecast that the city is seeing big gains in household formation because of rising incomes and strong migration. And, that vacancies in retail space will plummet for commercial space near residential areas.
Employment Growth and Tourist Magnet
Orlando is Florida’s third largest city with 2.3 million residents in the Orlando metropolitan area. Forbes just reported that Orlando tied with Cape Coral, Florida, as America’s two fastest-growing cities. In 2016, Orlando experienced 4.57% job growth. That’s expected to slow down a little this year to 3.54% but according to Forbes, Orlando will still be one of the biggest job creators in the country.
The city itself has grown from 10,000 residents in the year 2000 to more than 15,000 residents in 2015. It has more than 11,000 residential units in the city center including high-rise multi-family buildings, townhomes, and single-family homes. The apartment occupancy rate is about 96% and the average rent is $1,600 a month. Orlando says it’s downtown area is the “most searched neighborhood for real estate in the nation.”
Orlando is also a popular destination for tourists with a record 68 million visitors last year, according to a city website. And that’s not only due to its reputation as the “Theme Park Capital of the World”. As you know, Orlando is home to Disney World, Universal Studios, SeaWorld, and Lego Land. The Orlando Sentinel writes that people visit the city for a number of different reasons including golf, shopping, and theme parks.
And it says, these tourists are repeat customers. The Sentinel writes that many are drawn back to the area because there’s a wide variety of things to do in Orlando. “Visit Orlando” CEO George Aguel told the Sentinel, “We’re a golfer’s mecca. Water sports is huge here. They come for the parks. They come for the shopping. The numbers for shopping in this community are significant.”
Theme parks are also expanding. New attractions opening this summer include “Pandora — The World of Avatar at Disney’s Animal Kingdom” and Universal’s “Volcano Bay” water park. The centerpiece of that water park is a towering volcano that’s clearly visible from the highway.
The city is in the midst of a huge redevelopment plan. The “Downtown Orlando” website says it has $5.39 billion invested in these projects with more than $3.5 billion in projects already underway.
Some of the up-and-coming projects include the new Orlando City Stadium. It’s a privately funded project and will be home to Major League Soccer. It’s 435,000 square feet with retail space, office space, club space, and seating for 25,000. 49 of the seats are permanent rainbow chairs as a tribute to the people who lost their lives last year, at the Pulse Nightclub shooting.
Just two blocks from the stadium is the new Amway Center arena. It’s a world-class metal and glass building that’s LEED certified. Designers claim it is one of the most environmentally friendly, professional arenas in the country.
Next to the Amway Center is the proposed Sports and Entertainment District. The city wants to turn that into a mixed-use development site with hotels, stores, offices, convention halls, and residential units.
The old Amway Center is being transformed into something called the “Creative Village”. The goal is to turn that 68-acre site into a mixed-use community where people can “live, learn, work, and play”. The “I-4 Ultimate” project will create an urban park under the Interstate 4 bridge decks through the center of town. Planners want to turn that into a place for performance art, creative art, vendors, and recreational activities.
There’s also a new University of Central Florida campus headed for the heart of the city. The city website says: “The new campus will provide innovative education for high-demand fields that integrate with industry and place thousands of students within walking distance of jobs and internships.”
Orlando is considered a walkable transit-friendly city. It also has a high regard for U.S. car culture. Ace Cafe Orlando is a tribute to the world of motor vehicles. It’s a 35,000-square foot dining entertainment, and retail destination with plenty of “cool” cars and motorcycles on display for visitors.
Real estate investors also benefit from Florida’s business-friendly environment. It’s a judicial state which favors property owners, encourages new business growth, and does “not” collect state tax.
The RealWealth has also picked Orlando as a great place for buy & hold real estate investors. Come join us for an income property tour.