The 597-property market, comprising 149,477 apartment units in Orange, Seminole, Lake and Osceola counties, is "showing visible signs of recovery in 2003," Kevin Judd, a principal at Apartment Realty Advisors, says in a memorandum to clients. "Population growth continues to outpace both the state of Florida and the U.S."
He says expected apartment deliveries this year "have exhibited a dramatic decrease from historic highs." Occupancies are "trending upward" from lows reached in March 2002. About 77% of the apartment inventory is located in Orange County.
Judd says many infill submarkets have regained occupancies in the 91% to 96% range. "The highest occupancy in Orlando typically centers on infill, land-constrained areas such as East Orange County, Longwood, and Casselberry," he says. "These submarkets benefit from barriers to entry and generally have low inventories of vacant land available for apartment development."
The broker forecasts "vacancy rates and rental concessions should continue to improve throughout 2003 as strong job growth returns to the Orlando area." He says "several properties have recently gone under contract, indicating increased sales activity."
But he acknowledges the number of apartment sales and total sales volume "has fallen sharply from the highs recorded in 1999." Still, Judd predicts, "as Orlando's economic outlook continues to improve and the capital markets look to multifamily real estate as a hedge against the volatile stock market, transaction volume should increase significantly in 2003 and 2004."
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