Orlando is the hottest market in the country for apartment investors
Paul Brinkmann | Orlando Sentinel
The Orlando region has hit No. 1 in the U.S., but it’s not something you’ll like if you rent an apartment.
The metro area is now the top choice for real estate firms who want to invest in apartment buildings, according to the most recent market survey from National Apartment Association and RealPage.
One of the reasons the market is so attractive to investors: Rent is going up by almost 5 percent a year now, with increases of more than 4 percent for three full years.
The biggest positive attributes of Orlando are big growth in the sheer number of job openings and its population. The downside of that is, the lion’s share of those new jobs is still in the lower-paying hospitality sector.
But the growth in apartments, and the sale of apartment complexes, has been on a tear.
According to the data, apartment occupancy in Orlando stands at 96.5 percent while the U.S. average is 95.5 percent. Even more telling, Orlando’s present occupancy level is way above the local long-term average, measured going back to the early 1990s.
The survey, called Market Momentum, says Orlando has lots of apartments under construction, just more than 13,200 units. That will expand total inventory — now at about 219,900 units — by about 6 percent. Annual completions are about to go to some 9,000 units, up from about 6,000 units per year in 2016-17.
According to the report, “competition among new properties in initial lease-up should become more intense over the near term. Slowing of rent growth at the top of the product spectrum, in turn, could place some constraints on the ability to push rents in middle-market communities. The gap between Class A and Class B average monthly rents — about $300 — is a little smaller in Orlando than in most metros.”
The report also notes that Orlando renters move around a lot, and tend to be fairly young, working in hospitality and tourism, which can mean a lot of part-time or seasonal work.
RealPage stats show that only 48.5 percent of Orlando apartment renters stayed in place when their leases reached maturity during the last year.
Photo: National Apartment Association