Market Spotlight: Orlando

With a particular skew toward food service and hospitality jobs as well as tourism attractions and a reliance on visitors for economic activity, the Orlando market was one with some additional hurdles throughout the pandemic last year. As the calendar turned to 2021, at the national level multifamily demand continued to post impressive numbers and rent growth resurfaced. Happily, the Greater Orlando market has not been left out of this recovery.

As always, only conventional properties of at least 50 units will be included in the numbers referenced below.

New Supply and Net Absorption

Orland has continued to be a very active market for new supply. Around 4,700 new units were delivered through the first five months of the year, outpacing both the unusually low number from a COVID-affected 2020 as well as the volume of new units from the same portion of 2019. The uptick in new supply was met by very robust apartment demand. Net absorption through May of this year was double that of the same portion of 2019 after barely being in positive territory at the same time last year. All told, around 6,000 net units were absorbed from January through May of 2021. The combined impact of the new units and the net absorption was a 1.1% increase in overall average occupancy to just above 91%.

Even with large increases in demand in the top two price classes compared to 2019, Class C properties especially stood out. After net absorption of just more than 600 units through May of 2019, and barely more than 200 units last year, Class C properties absorbed almost 2,200 net units through May of this year. This resulted in an average occupancy gain of 1.7% to 93% for these properties.  The only submarket with a notable loss in rented units was the Eustis – Leesburg area, which lost just over 100 net rented units. This loss, combined with the introduction of a new property and within the context of a relatively small submarket by unit count, brought average occupancy down 11% to 88% overall.

Average Effective Rent and Concessions

Rent growth was equally as encouraging as the demand picture for Greater Orlando. Average effective rent rose by an eye-popping 6.4% through May of this year. This increase brought the average unit to $1,373 per month. By May of last year rent growth was already in negative territory for Orlando, and this year’s gain through May was more than double that of 2019. Average market rent, also referred to as asking rent, rose by 5.6%. Not only was this far better than the 1.3% retraction at the same point last year but compared very favorably to the 2.5% gain from 2019. The strong resurgence in market rent is a good sign for the area because it reflects that rent growth is not being driven only by receding concessions.

Speaking of lease concessions, the news has been positive there as well. While not the only reason for stout rent growth, a draw down both in availability and average value has undoubtedly been a major factor. The availability of discounts remained quite high compared to pre-COVID levels, but even so, the 29% decrease this year through May is nothing to sneeze at. At the close of the month, about 20% of conventional properties were offering a discount. There has also been a decrease in the average discount value, though not to the same extent. A 10% decrease brought the average concession package value to about 3 weeks off an annual lease after starting the year at 3.5 weeks off a 12-month lease.

Below these average numbers, some real differences exist. For example, although lease concession availability has declined across all four price classes so far this year, the Class D subset saw the average discount value increase by 36% to 3.25 weeks off an annual lease. On the rent front, average effective rent growth was progressively lower moving from Class A through Class D – with Class A rent growth topping 13% and Class D managing less than 2%.


2021 is off to a strong start for multifamily, and the Greater Orlando market has not been an exception. New supply is up slightly from recent years, but apartment demand doubled the pre-COVID mark from 2019. The impact on rent growth was profound as subsiding concessions and operators adjusting to new market conditions drove average effective rent up by more than 6% in the period.

Not all is rosy though. Some uncertainty remains around the expiration of the federal eviction moratorium and signs of continued struggles in the Class D segment have been apparent. Even so, with the traditional stronger summer months ahead and more typical economic activity resuming around the country, the Greater Orlando market appears poised to enjoy a healthy rebound in 2021.

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