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Downtown Development Board Community Redevelopment Agency City Hall 400 S. Orange Ave, 6
th Floor P.O. Box 4990 Orlando, FL 32802-4990
p:407.246.2555 f:407.246.3359 www.downtownorlando.com
Introduction:
Downtown Orlando Market Report Summary for Second Quarter 2014 The Downtown Development Board/Community Redevelopment Agency (DDB/CRA) retained Real Estate Research Consultants, Inc. (RERC) to prepare summaries of Downtown Orlando market activity on a quarterly basis. Due to the length of the document, the DDB/CRA prepares a market report summarization to help condense and digest the information found in the full report. Areas that are covered currently include:
Business Growth and Performance
Hospitality and Tourism
Residential Market
Commercial Office Market
Major Downtown Developments
Please note that Major Downtown Developments is the only section that does not originate
from the RERC report. This information is compiled by the DDB/CRA staff through the use of
information gathered by various City boards, along with communications with project
representatives.
If you have questions regarding the information contained herein, or to request a copy of the full RERC report, please contact Mercedes Blanca at 407.246.3625 or at [email protected].
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Downtown Orlando Market Report Summary for Second Quarter 2014
Business
During the second quarter of 2014, 81 businesses opened, of which 38% were professional
establishments. Total employment numbers within CRA boundaries are currently 74,324, with the
three largest contributors being educational services (22,183); public administration (16,009); and
professional, scientific, and technical services (10,395).
Total sales tax collection within the CRA for the second quarter of 2014 was $15,112,083, which is a
3.53% increase over year-over-year’s $14,596,518 and a 3.85% increase over last quarter’s
$14,551,724. Commercial rent ($2,714,541) and restaurants ($2,402,448) are the current sales tax
collection leaders, which reflect the general volume of gross sales. However, the increase in sales
tax collections from hotel and motel accommodations is noteworthy with a 4.8% or $771,523 year-
over-year change, bringing total sales tax collected for these businesses to 13% or $1,966,924. It
should be noted that not all sales are subject to sales tax. Examples of transactions in which sales
tax is not collected include the purchase of groceries and medication, along with certain services.
See Figure: Figure 1: Top Ten Sales Tax Collections by Type of Business within the CRA
Hospitality and Tourism
At 75.3%, Downtown Orlando’s year-over-year hotel occupancy levels have increased by 2.1%.
During the second quarter of 2014, there were 100,000 guests lodged in Downtown hotels which
was 4,000 guests short of last year’s number. This decrease is thought to be the result of the
Sheraton Orlando Downtown’s closure. This building is undergoing an extensive renovation and is
proposed to reopen as the Renaissance by Marriott in the second half of 2015.
With an average daily rate (ADR) of $135.47, Downtown continues to lead the market when
compared to Metro Orlando’s various submarkets, Orange County, and the City, which have ADRs
of $112.79 (submarket average), $121.03, and $118.61, respectively. In addition, Downtown’s
ADR has increased by $8.94 or 7.07% when compared to the same time last year.
See Figures: Figure 2: Hotel Occupancy Comparison Figure 3: Hotel Room Average Daily Rate Comparison
Residential Market
Downtown Orlando’s residential market had an impressive quarter with a 19% increase in sales
price per unit compared to the same quarter one year ago. Condominiums, which make up the
majority of the Downtown residential market, experienced a year-over-year increase of 20.5% with
an average sales price per unit of $304,758. The strength of the Downtown condo market is further
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demonstrated when comparing it to Orange County’s and the City’s averages of $137,099 and
$127,719, respectively.
The rental market within Downtown Orlando continues to perform strongly with occupancy rates
averaging 93.8%. This average rate includes SkyHouse which is in its initial lease up stage and had a
69% occupancy rate at the end of the second quarter of 2014, but has since increased to about 95%
occupancy. Of the 10 apartment buildings for which statistical information was obtained, eight of
the ten have experienced increases in occupancy. The remaining two buildings, Post Parkside and
Uptown Place, have held steady with strong rates of 98% and 95%, respectively.
When compared to year-over-year figures, apartment rental rates are trending in a positive
direction. Average monthly rental rates are $1,517 or $1.83 per sq ft which are $22 per month and
$0.23 per sq ft higher than last year’s rates. The Paramount has the highest average rates with
$2,242 per month and $2.05 per sq ft.
See Figures: Figure 4: Average Residential Sales Price Figure 5: Total Residential Sales, Downtown CRA Planning Areas by Average Price per Unit Figure 6: Occupancy of Major Apartment Buildings in Downtown Orlando CRA Figure 7: Average Rental Price per Square Foot, Major Apartment Buildings in Downtown Orlando CRA
Commercial Office Market
Downtown Orlando experienced 121,442 sq ft of commercial office gross absorption in the second
quarter of 2014, which is lower than last quarter’s 149,596 and the year-over-year 193,310 sq ft.
However, 52% of office space absorption in the City of Orlando took place within Downtown.
Where the Downtown area separates itself in the local market, is in its $21.61 per sq ft average
rental rate, which is higher than Orange County’s $19.13 per sq ft and the City’s $19.56 per sq ft.
This can be partly attributed to the greater proportion of Class A space in Downtown. In regards to
rental rates, Downtown experienced a decrease when compared to year-over-year’s and last
quarter’s numbers of $21.72 and $22.06, respectively. However, the same pattern was uncovered
at the City level.
When compared to downtowns of a similar size in Florida, such as Tampa, Downtown Orlando is
lagging slightly behind. At $21.61 per sq ft, the rental office market in Downtown Orlando is
currently $0.81 per sq ft less than that of Tampa, and with an occupancy rate of 85.2%, it is trailing
behind downtown Tampa’s 89.2%.
See Figures: Figure 8: Office Vacancy Rate Comparison within Downtown Orlando CRA Figure 9: Average Office Rental Rate per Square Foot within Downtown Orlando CRA Figure 10: Office Space Distribution as Percentage of All Classes Figure 11: Comparable CBD Office Buildings, Percent Occupancy Figure 12: Comparable CBD Office Buildings, Rental Rate per Square Foot
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Major Downtown Developments There are currently 19 projects underway representing approximately $2.72 billion ($1.24 billion
private and $1.48 billion public) in investment. These projects include nearly 2,768 residential units,
463 hotel rooms, 200,889 sq ft of retail space, and 1,290,038 sq ft of office space. In addition, there
are 10 proposed projects that represent about $2.34 billion ($41.6 million private and $2.3 billion
public) in investment. These projects will include roughly 1,009 residential units, 504 hotel rooms,
99,600 sq ft of retail space, and 280,000 sq ft of office space.
Downtown Projects - In Progress
Downtown Projects – Proposed
Project Investment
Residential
Units Hotel Rooms Retail (sq ft) Office (sq ft) Other (sq ft)
331 Cathcart Ave $1,200,000 5 - - - -
Artisan 420 $60,000,000 300 - 6,650 - -
800 N Orange
Ave TBD - - - 21,900 -
801/811 N
Magnolia TBD - - - 7,778 -
Central Station
$50,000,000
(Phase 1) 279 125 14,680 260,360 -
Church Street
Streetscape $16,000,000 - - - - -
Citrus Bowl
Reconstruction $207,700,000 - - - - 1,200,000
Creative Village $1,000,000,000 1,500 200 150,000 1,000,000 525,000
Dr. Phillips
Center $500,000,000 - - - - 365,700
Lexington Court
$17,800,000
(Phase 1) 104 - 6,559 - 22,543
Lymmo BRT
Expansion $24,000,000 - - - - -
Men's Service
Center $6,600,000 - - - - 33,000
MLS Soccer
Stadium $110,000,000 - - - - -
NORA $28,000,000 246 - 10,000 - -
Renaissance Hotel
Renovation $17,000,000
Residence Inn $27,000,000 - 138 4,000 - -
Sunrail $615,000,000 - - - - -
The Sevens $35,000,000 334 - 9,000 - -
Trinity Lutheran
CDC $7,100,000 - - - - 26,764
(Totals) $2,722,400,000 2,768 463 200,889 1,290,038 2,173,007
Project Investment
Residential
Units Hotel Rooms Retail (sq ft) Office (sq ft) Other (sq ft)
Ace Café TBD - - 18,000 - -
Cambria Suites TBD - 155 3,300 - -
Citi Tower $40,000,000 235 - 22,300 - -
Citrus Center
Improvements $1,600,000 - - - - -
Gertrude's Walk $1,500,000 - - - - -
Hyatt Place TBD - 205 - - 4,312
Interstate 4
Improvements $2,300,000,000 - - - - -
Orlando Sentinel
Complex TBD 746 144 56,000 280,000 -
Sports Entertain.
District TBD - - - - -
Thornton Park
Brownstones TBD 28 - - - -
(Totals) $2,343,100,000 1,009 504 99,600 280,000 4,312
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Sources: Real Estate Research Consultants and Development Contacts