No break in sight for rent costs in Orlando

With more than 10,000 apartments being built across Central Florida, renters may be tempted to think that rent hikes will ease up this year.

That’s unlikely, according to a new report by Real Data Apartment Market Research. Analysts forecast few vacancies, along with rising rents, in Metro Orlando for the next 12 months because of booming employment.

“We also expect to see continued rent growth due to high occupancy rates,” Real Data wrote in its report released this week. Orlando-area rents increased 3.9 percent in February from a year earlier and apartments had 3.8 percent vacancy rates — far below the 5 percent considered healthy for a market.

A test of rent strength in the downtown area will come as CITI Tower, the region’s tallest residential highrise, begins leasing in downtown Orlando possibly in the next month. With 26 stories, it will have 233 apartments new to a market that has grown with SteelHouse, NORA, The Sevens and SkyHouse in recent years.

Some of the largest new projects are nearing completion.

The Morgan Group began work on 376 units at Eight at East, 3200 Innovation Walk Loop in southeast Orlando. First units are to be delivered this spring.

Integra Land Company is building 360 units at Integra 360 near the intersection of State Roads 417 and 434 in the northeast Orlando area. They expect to deliver initial units in August, with full completion set for October.

Mill Creek Residential started 350 units at Modera Central, at 150 East Central Blvd. in the downtown Orlando area.

Overall, renters in the Orlando area paid an average $1,146 last month, ranging from $998 for one-bedroom units, $1,163 for two bedrooms and $1,278 for three bedrooms.

New jobs are the primary reason behind the scant apartment vacancies.

Some experts conjecture that the influx of new employees may not be enough to fill an abundance of new apartments underway and planned for the region. In addition to the 10,382 apartments being built in Orange, Seminole, Osceola and Lake counties, another 9,267 are in the planning pipeline.

“Supply is expected to outpace demand according to our forecasts, which are basically averages for the past two years,” said Kelly Reddecliff of Real Data. “But with a vacancy rate in the 3 percent range for a year now, Orlando has been in an apartment shortage, and there aren’t enough vacant units.” For now, she added, Orlando’s rental market heavily favors apartment owners.

Some areas within Central Florida are likely to reach the saturation for new apartments soon, said Shelton Granade, a vice chairman for CBRE in Orlando.

“There will likely be some competitive lease ups in certain pockets with higher concentrations of new product, but overall Orlando is really well positioned for very strong occupancy and rents,” Granade said.