orlando, fl - Capstone Apartment

Orlando, FL
Multi-Family Market Summary: Winter 2015
Presented By:
ORLANDO
Contents
Introduction
Introduction2
CAPSTONE APARTMENT PARTNERS prides itself on the continual value contributions we
are able to offer our industry, and thus we produce periodic Multifamily Market Summaries to
further inform the clients and industry we serve. Capstone believes that this market snapshot
will be beneficial to current owners, operators, investors, and other industry professionals who
are active in the Orlando, FL MSA as well as others who are looking to break into this market.
Market Commentary
3
Economic Overview
4
Sales Transactions
5
Proposed Development
7
Orlando Office
Tampa Office
Under Construction
8
Why Choose Capstone?
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111 N. Orange Ave.  Suite 1125
Orlando, FL 32801
208 N. Armenia Ave.  Suite B
Tampa, FL 33609
Orlando Museum of Art
Enon Winkler
Partner
407.616.0250
enon@capstoneapts.com
Deucie Bies
Investment Advisor
407.470.9030
deucie@capstoneapts.com
2
Jad Richa
Investment Advisor
727.282.5547
jad@capstoneapts.com
Brian Hunsicker
Investment Advisor
727.631.5870
bhunsicker@capstoneapts.com
ORLANDO
Why Orlando
Listed by CNNMoney.com as the 4th U.S. city most Americans are
moving to, Orlando offers superb quality of living for families, young
professionals, and retirees alike. Orlando features a great number of
lively communities to inhabit, fantastic year-round weather, cultural
opportunities, amateur and professional sports, as well as an array of
recreational activities. Continual population growth has led new and
existing companies to expand their operations and add new jobs; thus,
making employee recruitment and retention an easy task.
Known as Florida's friendliest metro for business with a workforce of
1.2 million people, Orlando continues to lead the nation in job growth
through the addition of more than 28,000 new jobs in the past six
months. The MSA’s unemployment rate is currently at a record low
of 5.4%. Orlando’s economic strength lies within the technology,
healthcare, tourism and hospitality, and manufacturing industries that
are booming market-wide.
Tourism
A number one worldwide travel destination, Orlando attracts 59
million visitors a year. The primary attractions to this family-friendly
region are Walt Disney World, Universal Orlando, and Sea World. As
the world's most popular destination, expansion is the norm in this
market. This coming spring the tourism mecca will open I-Drive 360,
a new entertainment complex that will feature a huge observation
wheel similar to the London Eye, Madame Tussaud's Orlando Wax
museum, Sea Life Orlando Aquarium and an array of retail shops and
restaurants. The staffing of I-Drive 360 is certain to further increase
regional demand for multi-family accommodations.
Multi-Family Fundamentals
Demand for apartments continues to remain healthy in the MSA
as evidenced by the positive absorption of 4,707 units over the past
six months. The vacancy rate has improved market-wide to 3.7%
despite an additional 4,707 new units coming online during the same
timeframe. The development pipeline is flourishing with an impressive
4,568 units under construction and 5,687 units proposed. The Central
submarket is currently the most desirable sector in the MSA; however,
owners and developers alike are beginning to look toward the southern
submarkets of the city as well. Capstone anticipates the vacancy rate
holding steady despite the new supply, and the region will continue to
see strong rent growth of 2.5%-3.5% in the next 12-18 months.
Apartment Comparison by Class
Vacancy Rate
Avg. Sq. Ft.
Class
Units
Lease-up
A (1-5 Years in Age)
B (6-15 Years in Age)
C (16-30 Years in Age)
C- (30+ Years in Age)
Stabilized Averages
7,675
6,790
40,050
59,575
27,784
134,199
22.7%
4.8%
3.0%
4.0%
4.0%
3.7%
Totals/Averages
141,874
4.8%
Avg. Rent
Avg. Rent/Sq. Ft.
1,093
1,032
1,080
936
836
963
$1,427
$1,371
$1,085
$911
$801
$963
$1.31
$1.33
$1.00
$0.97
$0.96
$1.00
970
$988
$1.02
MARKET COMMENTARY
Quality of Life
3
ORLANDO
Employment
ECONOMIC OVERVIEW
Recent Employment Announcements
Deloitte has plans to open a 130,000 squarefoot office in Lake Mary and will add 1,000 highpaying jobs over the next four years.
Employment
1
Walt Disney World
Tourism
62,000
2
Adventist Health System (Florida Hospital)
Healthcare
16,002
3
Publix Super Markets Inc.
Grocery
15,606
4
Universal Orlando Resort
Tourism
13,000
5
Orlando Health
Healthcare
10,000
6
Busch Entertainment Corporation
Grocery/Retail
7,800
7
Lockheed Martin Corporation
Advanced Technology
7,200
8
SeaWorld Parks & Entertainment
Tourism
7,000
9
Darden Restaurants, Inc.
Food/Beverage Services
5,950
10
Starwood Hotels & Resorts Worldwide Inc.
Hospitality/Lodging
5,369
Carmed Pharmaceutical has plans to relocate its
operations to Lake Mary. They will add 250 highpaying jobs in the process.
Voxx International Corporation, an automobile
equipment manufacturer, has plans to build a
125,000 square-foot flex space in Orlando, and
will add 134 new jobs over the next three years.
Orlando Major Employers (non-government)
Company
Industry
Rank
Viewpost, an online payment company, received
incentives to facilitate its plan to add 262 new
jobs over the next three years.
Wages & Population
There are 1,142,053 employees in the Orlando-Kissimmee-Sanford MSA who earn a mean hourly wage of $18.94 and an average annual income
of $39,400. In comparison, the state and national annual income averages are $41,140 and $46,440, respectively.
Historical Population
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Orlando City
209,401
216,501
224,824
230,239
232,321
235,860
239,425
243,794
250,159
255,483
Orlando-Kissimmee-Sanford MSA
1,866,597
1,939,766
1,999,994
2,034,878
2,060,968
2,082,421
2,139,372
2,174,224
2,223,456
2,267,846
Florida
17,375,259
17,783,868
18,088,505
18,277,888
18,423,878
18,537,969
18,846,054
19,083,482
19,320,729 19,552,860
Source: U.S. Census Bureau
4
The unemployment rate in Orlando is 5.4%, which is lower than the state rate at 6.1%
and the national rate at 5.9%. The market has experienced positive job growth of
28,000 jobs over the past six months.
ORLANDO
Community
City
Sale Date
Units
Sale Price
Price Per Unit
Sun Key
1986
Winter Park
10/16/2014
596
$57,700,000
$96,812
Landmark at West Place
2002
Orlando
9/3/2014
342
$38,500,000
$112,573
Sea Isle Resort
2014
Orlando
9/3/2014
356
$58,100,000
$163,202
Auvers Village
1990
Orlando
8/28/2014
480
$50,700,000
$105,625
Beacon Hill
1999
Orlando
8/20/2014
192
$9,500,000
$49,479
Parke East
1984
Orlando
8/14/2014
272
$19,500,000
$71,691
Signal Pointe
1969
Winter Park
8/14/2014
368
$40,800,000
$110,870
Retreat at Windermere
2013
Windermere
7/30/2014
332
$54,000,000
$162,651
Park at Salerno
1972
Orlando
7/10/2014
200
$11,400,000
$57,000
Arbour
1973
Orlando
7/10/2014
400
$21,300,000
$53,250
Silver Oaks
1989
Orlando
7/2/2014
320
$14,250,000
$44,531
Place on Millenia
2007
Orlando
6/26/2014
372
$50,085,000
$134,637
Commander Place
1995
Orlando
6/24/2014
216
$14,800,000
$68,519
Arden Villas
1998
Orlando
6/11/2014
336
$42,050,000
$125,149
Ridge Club
1993
Orlando
5/28/2014
372
$12,185,000
$32,755
Jasmine of Orlando East
1985
Orlando
5/14/2014
296
$15,898,100
$53,710
Maitland Gardens
1986
Orlando
5/12/2014
324
$17,401,882
$53,710
Heritage Estates
2005
Orlando
4/24/2014
204
$12,443,857
$60,999
Reserve at Rosemont
1980
Orlando
4/24/2014
344
$9,000,000
$26,163
Northbridge on Millenia Lakes
2005
Orlando
4/16/2014
607
$10,750,000
$17,710
Oak Forest
1989
Ocoee
4/3/2014
408
$27,070,000
$66,348
Elmhurst Village
2001
Oveido
4/1/2014
312
N/A
N/A
Park 9 (FORMERLY RIVERFRONT)
1997
Orlando
3/21/2014
356
$29,350,000
$82,444
Castle Woods
1993
Casselberry
3/1/2014
304
$17,100,000
$56,250
San Rocco (FORMERLY WATERVIEW CLUB)
1998
Orlando
2/10/2014
172
$12,500,000
$72,674
Cricket Club
1994
Orlando
2/5/2014
248
$14,850,000
$59,879
Harbor at Lake Howell
1989
Casselberry
2/1/2014
408
$40,000,000
$98,039
SALES TRANSACTIONS
YOC
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ORLANDO
Average Year of Construction
Average # of Units Per Transaction
2010
370
361
2005
360
2000
350
340
SALES TRANSACTIONS
2007
338
335
1995
1993
1992
1990
1985
330
1980
317
320
1976
1975
310
1970
300
1965
1960
290
Class A
Class B
Class C
Class A
AVERAGE
Class C
AVERAGE
Average Price Per Unit
Average Transaction Sales Price
$120,000
$45,000,000
$40,000,000
Class B
$39,714,317
$110,380
$100,000
$35,000,000
$30,000,000
$26,970,532
$25,000,000
$78,333
$80,000
$64,242
$21,738,845
$60,000
$52,026
$20,000,000
$15,300,000
$15,000,000
$40,000
$10,000,000
$20,000
$5,000,000
$0
$0
Class A
Class B
Class C
AVERAGE
Class A
Class B
Class C
AVERAGE
Class A represents properties built from 2000-2014, Class B includes properties constructed from 1985-1999, and Class C signifies properties constructed in 1984 or earlier.
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ORLANDO
Developer
Communities Proposed (100 Units and Above)
Community
Units
Road/Intersection
Submarket
Artisan 420
299
420 East Church St.
Central
Summa Development Group
Citi Tower
233
101 Lake Ave.
Central
Atlantic Housing Partners
Lexington Court
104
315 West Concord St.
Central
The Tribute Company
Orlando Sentinel Apartments
318
501 North Orange Ave.
Central
Pollack Shores
The Princeton at College Park
226
646 West Smith St.
Central
Pizzuti Construction
The Sevens
325
North Orange Ave.
Central
Greystar
Elan at Audubon Park
396
980 Warehouse Rd.
East-1
UP Development
Fashion Square
250
Herdon Ave.
East-1
Catalyst Development
Catalyst Town Park
296
12221 East Colonial Dr.
East-2
PAC Land Development
Park Place
32 (275 COMPLETE)
940 City Plaza Way
East-2
Lecesse Development
Rize at Winter Springs
224
SR 434/Doran Dr.
Northeast
Weston Housing Partners
Weston Park
201
Longwood St./East Palmetto
Northeast
Crescent Communities
Altamonte Gateway
249
SR 434/Maitland Blvd.
South-1
Lennar Multifamily
Eclipse
252
Millenia Blvd./Hwy.4
South-1
BCF Financial
Gardens on Millenia
284
South John Young Pkwy.
Southeast-2
Klein Companies
Dwell at Lake Nona
274
12701 Narcoosee Rd.
Southeast-2
Lake Nona Development Company
Lake Nona Town Center
280
Lake Nona Blvd./Tavistock Blvd.
Southeast-2
Altman Companies
Altis at Sand Lake
344
7001 Palm Pkwy.
Southwest-2
NRP Group
Big Sand Lake
196
10298 Turkey Lake Rd.
Southwest-2
MMI Development
Windermere Cay
108
8200 Jayme Dr.
Southwest-2
Unicorp
Zen
266
Perrihouse Acres Ln.
Southwest-2
Skorman Construction
Park Place at Maguire
242
1650 Maguire Rd.
Southwest-2
Artisan 420
Lexington Court
The Sevens
PROPOSED DEVELOPMENT
Jefferson Apartment Group
7
ORLANDO
UNDER CONSTRUCTION
Communities Under Construction (100 Units and Above)
8
Developer
Community
Units
Road/Intersection
Submarket
Rida Associates
Central Station
280
434 North Orange
Central
Debartolo Development
Gallery at Mills Park
175
1650 North Mills Ave.
Central
Ustler Development
The Ivy
248
2650 Dade Ave.
Central
GDC Properties
NORA
246
899 Orange Ave.
Central
Contravest
Courtney at Lake Shadow
244
545 Keller Rd.
Central
Epoch
Paseo
240
Denning/Canton Ave.
Central
Panther Properties Investment
Integra Village at Lake Forest
209
101 Integra Village Trl.
Central
Flournoy Development
Citi Lakes
346
12051 International Dr.
East-2
Epoch
Station House
200
188 East Crystal Lake Dr.
North
Contravest
The Courtney at Universal
355
9703 Avelliono Rd.
South-1
Epoch
Sea Isle Resort
202
Sea Coral Dr.
South-2
Rock Harbor Residential
Emerson at Celebration
338
1831 Emerson Ridge Rd.
South-2
Faison
Evander Square
24 (165 COMPLETE)
1415 Latta Dr.
South-2
Panther Properties Investment
Integra Cove
338
6800 Westwood Blvd.
South-2
Atlantic Housing Partners
The Loop
152
3201 Espinosa Dr.
South-2
Lecessee Development
Grandville at Jubilee Park
330
6807 Hazeltine National Rd.
South-2
Epoch
Nona Park
302
Dowden Rd./Narcoosee Rd.
South-2
Emerson International Inc
Sanctuary at Eagle Creek
282 (268 COMPLETE)
9800 Sanctuary Approach Rd.
Southeast-2
Wood Partners
Rialto
200
7335 Sandlake Dr.
Southwest-2
Central Station
Station House
The Loop
ORLANDO
Carolinas
Georgia
Virginia
Tennessee
Kentucky
Alabama
Florida
West Virginia
The People Sell the Deal
Market Expertise & Product Niche
Capstone sits atop the private capital sector of multi-family investment sales for multiple reasons. Our deliberate and concentrated focus and
expertise in not just the primary markets of the Southeast & Mid-Atlantic, but also the secondary and tertiary markets within our region, identifies
us as the ideal candidate for such assignments. Capstone’s investment sales team has completed a multitude of transactions across the primary,
secondary, and tertiary markets of the Southeast & Mid-Atlantic, and our track record of success can be attributed to our comprehensive coverage
and expertise among these markets, as well as our relationships with the owners and investors who remain active in this environment.
National Exposure via Cutting Edge Technology
Capstone has developed and maintains industry leading national databases, expansive information delivery methodologies, and various
proprietary activity tracking systems. These tools are utilized daily by the investment sales team, analysts, and back-office support staff allowing
for optimal operational efficiency. This enables Capstone’s investment brokerage team to spend nearly all of its time servicing clients, interacting
with industry players and active asset traders, and promoting transactions.
Reputation and Results
WHY CHOOSE CAPSTONE?
Capstone’s Southeast & Mid-Atlantic Investment Sales Team is among the market leaders within our industry sector
and respective region. We place client service above all else, and can guarantee that no one else will work smarter and
harder in achieving the highest level of results for our clients. We don’t rely on a logo to sell the deal, but rather utilize
the industry expertise and investment acumen, tremendous drive and work ethic, and unbeatable salesmanship of the
team members assigned to each project. At the end of the day, it’s the individuals that drive value and sell the deal, and
we know the capabilities of our individual team members are second to none.
Capstone prides itself on its impeccable industry reputation and the core values and behaviors of the firm that drive daily operations. The
firm possesses an unblemished reputation and track record industry-wide, and, as such, the firm’s trusted relationships among the apartment
investment community continue to facilitate seamless, fluid, and successful sales transactions.
*
Information in this report has been provided by the following resources: The Orlando Real Data Report October 2014, Direct Company Contact , OBJ Book of Lists 2013, REIS Report, Costar, Business Journals, Harris
InfoSource, Lexis Nexis, LoopNet, Bureau of Labor Statistics, county tax records, and various multi-family industry contacts. Source images provided by Scott Akerman (pg.1) via https://creativecommons.org/licenses/
by/2.0/, photo by Ebyabe (pg. 2) via https://creativecommons.org/licenses/by-sa/3.0/igo/.
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