In a report by Dodge Construction Network, the value of commercial and multifamily construction starts in Orlando quickly rose in 2021 – that’s almost 40% from 2020 and nearly 14% from its pre-pandemic levels of 2019.
Orlando metro, the report shows, is outpacing national trends – a year-over-year increase of 16% across the U.S. from 2020 to 2021. Though these numbers are still below 2019 levels.
2021 construction starts for Orlando “valued at just under $4.3 billion” as Richard Brand, a chief economist for Dodge Construction Network, states in his report.
Orlando’s value for commercial and multifamily construction starts places the city as the 14th in the nation, this is ahead of Denver that is topping at $4.26 billion, and just below of Chicago at $4.86 billion. The top performers for 2021 were:
- New York ($26.82 billion)
- Dallas-Fort Worth ($10.66 billion)
- Miami ($8.43 billion)
The increase is fairly uneven, as the starts are focused on warehouses and multifamily activity, “while office and hotel construction remain more constrained by the pandemic,” as Branch states. “Looking ahead, 2022 should bring with it a more even recovery spread across most commercial project types, while multifamily will continue to benefit from the high cost of single-family homes.”
Multifamily Construction
One of the reason why multifamily construction starts were up 36% year-over-year is due to the rent growth for apartments says Joe LaFleur, investment adviser, and will continue to grow.
“This is the most demand I’ve seen in my career,” LaFleur said.f “(Multifamily) construction starts are up — well, there’s a reason. Values are up significantly and rents are up significantly. … We have incredibly strong population growth and, unless that disappears, there’s going to be massive demand for multifamily and single-family residences.”
According to CoStar Group research, the accelerated pace of 2021 projects have rolled over into 2022. As of mid January, over 14 thousand apartment units are under construction in Orlando.
At end of 2021 Multifamily vacancy rate for Orlando metro was 5.2% compared to 10% for year-ago period. Average monthly rent has increased by 26.4% – that’s about $1,666 per month.
Warehouse Construction
Warehouse construction increase is due to the pandemic’s acceleration of the eCommerce sector. Online purchasing affected last-mile logistics, and warehousing needed to be strategically implemented to meet those needs.
Currently, there is roughly 3.5 million square feet under construction for industrial space. Industrial space vacancy rate average for Orlando metro is 3.5% compared to 4.9% for the pervious year; the market rent rent of $10.13 per sq. ft. in this sector increased up to 10.8% year-over-year.
Business relocation from cities like Boston, New Jersey and New York to the Orlando metro area is a contributing factor to the area’s real estate market and adds to the commercial remodeling business to accommodate company’s rebranding endeavors.
