Corporate Expansions Bolster Renter Demand; Construction Starts Tapering
- Local employment and household growth support rental demand. Employment losses in the leisure and hospitality sector due to the pandemic negatively affected the performance of multifamily properties across the metro in 2020.
- Deliveries approach record but may slow over the next few years. Orlando has consistently posted some of the strongest population and job growth figures in the nation, which prompted developers to build at a pace the metro has not seen in two decades.
- Following a period of uncertainty, investment activity escalated in Orlando during the fourth quarter of 2020 and has since further accelerated.
- The increase in Class A transactions over the last four quarters contributed to the average sale price per unit in Orlando climbing 2.2 percent to $158,400, while the average cap rate fell 20 basis points to 5.2 percent.
- Increased competition for assets and compressing cap rates drew investor interest farther away from the CBD.
* Forecast; ** Through 2Q
Sources: CoStar Group, Inc.; Real Capital Analytics; RealPage, Inc.