Orlando, Florida, draws tenants and principals alike to one of the hottest, thriving commercial real estate markets in the US.
The fast-growing metropolitan resort town is home to millions of residents, world-renowned tourist destinations, and an impressive inventory of land, commercial property, and upcoming development projects. Crexi is proud to offer Orlando-based investors and national principals the tools they need to analyze and transact Orlando commercial real estate.
Real estate agents, too, can take advantage of Crexi’s lead tracking and listing management tools to close more deals and expand their networks. Thanks to Crexi’s robust listing platform, Orlando property brokers can save time and maximize their business.
At the time of this writing, Crexi’s marketplace has assisted $440 billion in total property transactions and represented more than $2 trillion in commercial real estate listings.
Crexi proudly serves Orlando, Lake Buena Vista, Kissimmee, Winter Garden, Winter Park, Altamonte Springs, and Orange County as the region’s fastest-growing online CRE platform.
The State of Orlando Commercial Real Estate
Orlando, Florida, is a major city located in the central region of the state. The area is known for its warm weather and many tourist attractions, making it a popular destination for residents and businesses.
Orlando is situated near several other major cities in Florida, providing residents with access to various amenities and services. In addition, the city’s economy is diversified and growing, making it an attractive investment opportunity. The city’s location makes it a good choice for investing in Orlando FL commercial real estate.
Orlando Regional Breakdown
Orlando is among the top 15 cities for projected population growth, with employment projected to double over the next few decades. Over the past ten years, the population of the city of Orlando soared by 29%, according to the most recent census:
- Metropolitan Orlando is home to over 2.6 million, with more than 307,000 residing in the city of Orlando.
- Greater Orlando – also known as Central Florida – includes the principal cities of Sanford, Kissimmee, and Orlando.
- Between 2010 and 2020, the region had a net increase of almost 540,000 residents.
- GlobeSt.com recently reported that population growth in Orlando is sparking investor interest in office space.
- Office-using employment is among the fastest-growing job sectors in Greater Orlando.
- The median age in Orlando is 38.5, about 90% of the figure in Florida.
- 54% of the residents are between the ages of 20 and 59.
Orlando Job Market
Orlando’s economy is amidst a long-term expansion, driven by tourism but supported by a diversifying local economy. Expansion of the area’s theme parks and non-tourism industries will support significant growth of the local economy and multifamily markets. Over the past year alone, employment in Greater Orlando soared by more than 6.7%:
- According to the US Bureau of Labor Statistics, unemployment in Orlando is down to 2.9%, having added over 87,000 new jobs in the past year.
- Fastest-growing job sectors in Orlando include manufacturing, trade and transportation, information and financial activities, leisure and hospitality, and professional and business services.
- GDP for Orlando-Kissimmee-Sanford is $144 billion, increasing by 53% over the past decade.
- Orlando ranks 2nd in the country of job growth, with 80% of employment in the metro area outside of hospitality and tourism, according to the Orlando Economic Partnership.
- Target industries in Orlando include headquarters and regional offices, optics and photonics, advanced manufacturing, autonomous vehicles, life sciences, healthcare, aerospace and defense, and fintech.
- The top 10 largest employers in Central Florida include Walt Disney World Resort, AdventHealth, Orange County Public Schools, Orlando International Airport, Lockheed Martin, and Siemens Energy.
- Orlando leads the nation with a low cost of doing business, a very friendly tax climate, and relatively affordable real estate.
- According to Data USA, median household incomes grew by nearly 5% year over year, while median property values increased by over 9%.
- Over 90% of the residents are high school graduates or higher, while over 35% hold a bachelor’s degree or an advanced degree.
- The University of Central Florida, Florida A&M University College of Law, and Valencia College are three of the dozens of higher education institutions in the area.
- Greater Orlando boasts over $12 billion in transportation infrastructure investments, with over 9 million people within a 2-hour drive and three major ports less than two hours away.
- Orlando is reachable by Interstate 4 and SunRail, and its airport is the second busiest in Florida. Airlines that fly in and out of Orlando International Airport include Frontier, JetBlue, Lufthansa, and Virgin Atlantic.
Orlando Industrial Market
The Orlando industrial market is experiencing new historic highs for rental rates while vacancy remains at historic lows. Central Florida’s strong e-commerce growth and population density have created a demand for last-mile distribution facilities. Additionally, a shortage of truck drivers has led to a need for more stops along the supply chain, which benefits centrally located metros like Orlando. Avison Young reports the most recent statistics for industrial real estate in Orlando:
- Total industrial inventory: 140,731,303 SF
- Average asking rent: $10.25/SF per year, NNN
- Vacancy rate: 3.7%
- Absorption: 1,723,692 SF year to date 2022
- Key lease transactions by tenant: Mavis Discount Tire 295,460 SF, Empire 188,400 SF, United Facilities 133,000 SF, Walmart 76,180 SF
- New construction: 7,403,421 SF under construction with top projects under development in the Northwest and Airport-Southeast submarkets
- Investment sales trends: $1.2 billion year to date, average sale price $145/SF
- Largest industrial submarkets: Airport-Southeast, Orlando Central Park, NE Orange Road Industrial
Orlando Office Market
Now might be the ideal time for tenants looking for office space for rent in Orlando and buyers looking to invest for the long term. According to Avison Young, asking rents have remained flat throughout the year and may begin to decrease as landlords become more competitive. Here are the most recent statistics for the Orlando office market from Cushman & Wakefield:
- Total office inventory: 35,887,854 SF
- Overall average asking rents: $25.78/SF per year, full-service gross
- Vacancy rate: 13.8%
- Absorption: -98,689 SF (through Q3 2022)
- Leasing activity: 1,596,257 SF year to date
- Key leases by tenant: FedEx 70,450 SF, HNTB engineering consultant 32,096 SF
- New construction: 711,510 SF currently under construction
- Investment sales trends: $224 million in acquisitions in Q1 2022, sales price $173/SF, market cap rate 7.5% (NAR Commercial Metro Market Reports Q1 2022)
- Largest office submarkets: Central Business District, Tourist Corridor/Celebration, Maitland
Orlando Retail Market
Retail demand in Orlando FL, is growing due to solid in-migration and a growing economy. The number of visitors coming into Orlando International Airport is getting closer to the number of visitors before the pandemic started. Asking rental rates for Orlando retail space increased during the second quarter due to high occupancy rates, tight supply for prime area, and increased consumer spending, according to the latest report from NAI Realvest and the NAR:
- Total retail inventory: 152,226,863 SF
- Average asking rent: $25.52/SF per year, NNN
- Vacancy rate: 3.6%
- Absorption: 2,380,699 SF over the past 12 months
- Key leases by tenant: Universal Epic Universe 4,791,600 SF, BJs Wholesale Club 103,111 SF, Spirit Halloween 62,725 SF, according to Cushman & Wakefield
- New construction: 938,324 SF delivered over the past 12 months, with 2,255,399 SF under construction
- Investment sales trends: $276 million in acquisitions in Q1 2022, average sales price $240/SF, cap rates 6.7%
- Median household income: $64,936, with 63% of households earning $50K per year or more
Orlando Multifamily Market
Orlando’s apartment rental market is recovering, and the job market is improving, according to the Multifamily Metro Outlook report from Fannie Mae. Multifamily rents and vacancies should remain healthy as the area returns to its expected long-term growth patterns. Matthews Real Estate Investment Services notes that Orlando property for sale is a prime market for multifamily investors chasing high yields. Here are the most recent market statistics from the firm:
- Total housing units: 1,117,189
- Renter occupied: 37%
- Multifamily inventory: 312,813 units
- Average asking rent: $1,820
- Rent growth: 15.3% year-over-year
- Vacancy rate: 5.5%
- New construction: 10,300 units have been delivered over the past 12 months, with 24,000 units under construction, according to Marcus & Millichap
- Investment sales trends: $9.1 billion over the last 12 months, $260,000 average price per unit, cap rate 4.2% on average
- Submarkets with significant developments: Lake Nona, I-Drive
- Per capita income: $33,928
- Median age: 38.5, about 90% of the figure in Florida