Introduction: Downtown Orlando Market Report Summary, 3Q2017 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 condense the information found in the full report. Areas that are currently covered include: Business 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 from project representatives. If you have questions regarding the information contained herein, or to request a copy of the full RERC report, please contact me at 407.246.2102 or at Kimberley.Allonce@DowntownOrlando.com. 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
Downtown Orlando Market Report Summary for Third Quarter 2017 Business For the 3 rd quarter 2017, 51 licenses were issued for businesses within Downtown Orlando; this is a 15% decrease over the second quarter of 2017 and a 37.8% increase compared to the same quarter last year. Approximately 37.3% of the licenses issued within the CRA were for professional establishments. The three largest employment sectors in Downtown Orlando were Educational Services with 24,286 jobs (30.3% of total jobs), Public Administration with 17,698 jobs (22.1% of total jobs), and Professional, Scientific and Technical Services with 12,384 jobs (15.5% of total jobs). Additionally, employment in Professional, Scientific and Technical Services increased by 9.8% compared to the same quarter last year. During the 3 rd quarter 2017, the total sales tax collection within the CRA was $14,106,718 which is a decrease compared to the 2 nd quarter 2017 and a 26.9% decrease compared to the 3 rd quarter 2016. The three largest sales tax collection sectors were Lease and Rental of Commercial Property with $2,988,239, Restaurants, Lunchrooms, and Catering Services with $2,400,296, and Hotel/Motel Accommodations with $1,873,370. Not all sales are subject to sales tax; for instance, sales tax is not collected on 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 With 1,614 available hotel rooms, approximately 109,000 guests were lodged in Downtown Orlando s hotels for the 3 rd quarter 2017. The average hospitality occupancy rate was 77.1% which is 1.9% lower than the previous quarter; this is not unusual as the first and second quarters tend to have the highest occupancy percentages of the year in Downtown Orlando. The average hospitality occupancy rate for the 3 rd quarter 2017 increased by 4.75% and 1.31% compared to the same quarter in 2015 and 2016 respectively. Downtown Orlando s average daily rate (ADR) was $152.25, which is the highest when compared to Metro Orlando with an average daily rate of $121.11, Orange County with $128.55, and the City with $127.11. Additionally, Downtown Orlando s average daily rate (ADR) increased by 5.4% and 2.3% compared to the same quarter in 2015 and 2016 respectively. See Figures: Figure 2: Hotel Occupancy Comparison Figure 3: Hotel Room Average Daily Rate Comparison Page 2
Residential Market During the 3 rd quarter 2017, the average sales price per unit in Downtown Orlando was $248,838 which is lower than that of Orange County at $284,372 and that of the City at $264,374. Approximately 90% of the total residential dwelling unit sales were condominium units; total residential dwelling unit sales was 93 which is higher than 76 sales reported in the 2 nd quarter 2017. Total residential dwelling unit sales increased by 45.3% compared to the 3 rd quarter 2016 Overall, the rental market in Downtown Orlando continued to perform well with an average occupancy rate of 95.4% for the reported period; this is a 1.5% increase compared to the same quarter last year. All fifteen of the apartment buildings have occupancy levels above 90%. Among rental apartments surveyed during the 3 rd quarter 2017, the average rent was $1,560 per month which is higher than the 2 nd quarter 2017 average of $1,550 per month. For the 3 rd quarter 2017, the average price per square foot slightly increased from the previous quarter to $1.69. 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 In the 3 rd quarter 2017, the office occupancy rate in Downtown Orlando was 90.2% which is higher than the previous quarter; it is lower than that of the City (93.2%) and that of Orange County (93.2%). There has been a downward trend in vacancy rates which indicates that the commercial office market continued to perform well. The average price per square foot was $24.37 which is lower than the average price of $24.41 per square foot reported for the 2 nd quarter of 2017 but higher than the average price of $23.82 reported for the same quarter last year. Office Space categorized as Class A had the largest percentage (55.1%) contribution in Downtown Orlando while office space categorized as Class C had the highest occupancy rate (95.2%). Compared to other major cities in Florida, Downtown Orlando had the second lowest occupancy rate (90.2%) for CBD office buildings compared to Miami (83.1%), Fort-Lauderdale (90.5%), Jacksonville (91.3%), and Tampa (91.9%). Downtown Orlando also had the second lowest rental rate ($24.37) per square foot compared to Jacksonville ($20.20), Tampa ($26.51), Miami ($37.87), and Fort-Lauderdale ($38.08). 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 Page 3
Major Downtown Developments As of the 3 rd quarter 2017, there are currently 15 projects underway in Downtown Orlando representing more than $4 billion ($1.1 billion in private and $2.9 billion in public) in investment. These projects include nearly 1,612 residential units, 632 hotel rooms, 62,665 sq. ft. of retail space, and 306,500 sq. ft. of office space. Furthermore, there are 7 proposed projects representing $426 million in investment, 1,212 residential units, 376 hotel rooms, 197,750 sq. ft. of retail space, and 319,006 sq. ft. of office space. Downtown Projects - In Progress Project Investment Residential Units Amelia Court $ 60,000,000 256 Cambria Suites Hotel 20,000,000 Church Street Plaza 125,000,000 Colonial Pedestrian Overpass $ 9,100,000 Crescent Lucerne 62,000,000 Dr. Phillips Center for the Performing Arts (Phase 1 & 2) $ 550,000,000 Gertrude's Walk $ 1,500,000 I-4 Ultimate Improvement Project $ 2,300,000,000 Irving on Park $ 4,000,000 21 Lake Eola Heights $ 4,600,000 12 Marriott Orlando Downtown 17,000,000 Modera By Mill Creek, Central 74,000,000 SunRail $ 615,000,000 UCF Dr. Phillips Academic Commons 65,000,000 UCF Student Housing 105,000,000 Totals 4,012,200,000 Hotel Rooms Retail (sq ft) Office (sq ft) Other (sq ft) $ 155 $ 180 8,200 206,500 $ 373 31,000 $ 297 $ 350 13,465 $ 148,000 $ 600 (beds) 10,000 100,000 50,000 $ 1,612 632 62,665 306,500 198,000 Downtown Projects Proposed Project Investment Residential Units Hotel Rooms Retail (sq ft) Office (sq ft) Other (sq ft) Élan on Marks Street $ 7,000,000 10 Magnolia Hotel TBD 126 7,000 Sports Entertainment District $ 200,000,000 450 250 166,000 200,000 The 520 $ 88,000,000 363 6,800 107 Hillcrest TBD 10,950 2,356 94,390 333 North Rosalind $ 95,000,000 389 14,000 500 North Orange Avenue $ 36,000,000 116,650 Totals $ 426,000,000 1,212 376 197,750 319,006 101,390 Page 4
Page 5
Page 6
Page 7
Page 8
Page 9
Source: Real Estate Research Consultants, Inc. Page 10