Multifamily developers in Orlando, Florida, have been building high-end luxury apartment homes in recent years, according to Jennifer Shaw, multifamily market analyst with Carolinas Real Data.

“Apartments are often pre-wired for high-speed Internet access, and they include a variety of new amenities such as spa services on-site, a valet, dry cleaning and trash services, as well as attached garages for every apartment home,” Shaw says. “Newer apartment communities are also more than 10 percent larger in size than the average apartment in the Orlando market. Several of these projects have been infill developments or mixed-use sites that include retail space.”

Several developers are currently active in the market. CED Companies has two communities near the Mall at Millenia, one that was recently completed and another that is under construction. CED also has a property on Stable Drive that is under construction. GDC Properties, Epoch Management and Colonial Properties Trust each have at least two projects currently proposed or under construction.

Almost every submarket is experiencing development. Recently, the area defined as the East-2 submarket, around the East-West Expressway and Colonial Drive, has seen an increase in apartment development. A significant amount of development has been completed recently or is underway in the South-2 submarket, which reports the highest rents in the area.

Also, comments Shaw, “The Forbes Company’s Mall at Millenia has encouraged some developers to build apartments in the area we define as the South-1 submarket.”

“Due to weakening tourism, which has been caused by the sluggish economy, and the increase in development, these areas may experience an increase in vacancy at least in the near term,” Shaw notes.

Significant concessions remain in the market as the area continues to cope with the significant rise in vacancy rates that began in the later half of 2001. With vacancy rates averaging around 9 percent and job growth still weak, concessions of 1 to 2 months’ free rent are common.

The current vacancy rate is 8.8 percent, up from 8.3 percent in August 2002. One-bedroom units are faring the best with a vacancy rate of 8.2 percent, versus three-bedroom units, which are reporting the highest vacancy at 10.2 percent.




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