Orlando Apartment Market Still Tepid

ORLANDO-Orlando’s apartment market continues to struggle, with vacancy rates still rising and rents falling, according to Marcus & Millichap’s Market Update on the apartment market for the first quarter 2010.

A number of trends keep the downward momentum going in the Orlando apartment market. Declines in hospitality and leisure employment have negatively impacted Class B and C product, while tenant demand for Class A product has remained relatively strong. Five of Orlando’s 11 submarkets posted vacancy rates of less than 10% in first quarter 2010, though the lower rates may have been achieved through concessions. Still, the fact that there are still many foreclosures in the pipeline, fuels demand for rental apartments.

Only 950 rental units are scheduled for completion in 2010, compared to 2,176 in 2009 and more than 3700 units the year before. This would be good news for the rental market, except for the fact that there is a significant pipeline of stalled, planned projects and shadow stock in some submarkets, which could hobble a recovery, according to the Marcus & Millichap report.