Yardi Matrix: Orlando’s Economic Boom
- May 09, 2016
Buoyed by record tourism numbers and strong job growth, Orlando‘s economy is booming. Along with significant population gains, those are ingredients for a healthy multifamily market, which is seeing strong rent growth, increasing development and record transaction activity.
Tourism and business conferences remain pillars of Orlando’s economy, but the economic landscape is increasingly diversifying, with an up-and-coming technology sector, improvements in trade and transportation, as well as growing health systems. Orlando is undergoing $15 billion worth of infrastructure projects that will boost construction and trade. Projects include the I-4 Ultimate project, which will eventually connect the Gulf of Mexico to the Atlantic Ocean, the SunRail express train that will connect Orlando to Miami, and the region’s commuter rail system, which will serve tourists and commuters alike.
With transaction activity at a new record high, the outlook for multifamily fundamentals is favorable. Strong demand for units will help fill the 5,400 units likely to come online in 2016. However, the accelerated economy points toward affordability issues for low-wage hospitality workers, since low- and mid-quality units saw rent gains of a whopping 8.7% in 2015. We expect another years of robust rent growth in 2016, at 6.3%.