MARKET SNAPSHOT

Orlando 3Q 2024

AVERAGE RENT

$1,766 3Q 2024

OCCUPANCY RATE

93.4% 3Q 2024

QUARTERLY NET DEMAND

3,946 [YTD: 11,270]

YoY RENT CHANGE

-1.5% 3Q 2024

YoY OCCUPANCY CHANGE

+30 BASIS POINTS

QUARTERLY COMPLETIONS

5,080 [YTD: 12,276]

KEY TAKEAWAYS

The disparity between new supply and demand is at the lowest level since 2021. Net absorption through the third quarter of 2024 has already nearly doubled the annual figure for 2023 and is up almost 400% compared to the third quarter of 2023.

The development pipeline is contracting. After peaking at 25,480 units in the first quarter of 2023, the number of units in the pipeline has consistently declined to 12,601 in the current quarter, the lowest level since 2019.

Occupancy rates remain stable. Average stabilized occupancy has held steady thus far in 2024 while absorptions have increased, suggesting that the market is adding new renters.

SUPPLY & DEMAND
  • QUARTERLY NET DEMAND

    3,946 UNITS
    [YTD: 11,270]

While the Orlando multifamily market continues to experience a historic wave of new supply, rental demand—measured by net absorption—has been a positive development in 2024. Over the first three quarters of the year, more than 11,000 units have been absorbed on a net basis. This three-quarter total is particularly impressive considering that, with one quarter remaining in 2024, net absorption has already surpassed every annual total from the past decade except for 2021.

Notably, renter demand has been heavily concentrated in the I-Drive Orlando submarket, which absorbed 3,979 units over the past 12 months—accounting for 29% of all units absorbed in the Orlando market during this period. The Northwest and Southwest Orlando submarkets followed, contributing 14% and 15% of the market’s total absorptions, respectively.

  • QUARTERLY COMPLETIONS

    5,080 UNITS
    [YTD: 12,276]

After reaching an all-time high in 2023, Orlando’s apartment development pipeline has steadily declined since. The number of units under construction in the metro area peaked at 25,480 in the first quarter of 2023. As of the third quarter of 2024, that figure now stands at 13,601 units—the lowest level since 2019. Although deliveries remain elevated, this trend is expected to shift abruptly, as developers have pulled back on new starts in 2024.

Most new construction has been concentrated in the western part of the metro area, particularly in the I-Drive, Southwest, and Northwest submarkets. The I-Drive corridor, a hub for employment and tourism, has emerged as a focal point for population growth in recent years.

Annual Demand vs Completions

Occupancy & Rent Trends

OCCUPANCY TRENDS

Stronger-than-expected population growth has helped stabilize the overall occupancy rate in the Orlando multifamily market, steadily narrowing the gap between supply and demand. Oxford Economics revised the metro area’s 2023 population growth upward from 1.8% to 2.1%. Additionally, Orlando is the only Florida market currently ranked among the Top 10 U.S. multifamily markets for rental demand in 2024. These factors have maintained a relatively stable occupancy rate (excluding properties in lease-up) of 93.4% to 93.5% over the past four quarters, despite elevated levels of new deliveries. The current occupancy is also 30 basis points higher compared to the same time last year.

Stabilized occupancy rates are fairly consistent across different property tiers, ranging from 93.0% for lower-tier properties to 93.7% for high-end developments. Similarly, occupancy levels across all Orlando submarkets show little variation, ranging from 92.3% in West Orlando to 95.1% in the East Outlying submarket.

RENT TRENDS

Although average rents in the Orlando market continued to decline in the third quarter of 2024, decreasing by 1.5% year-over-year, rent trends have begun to show signs of improvement alongside strengthening demand. Rent declines reached their lowest point at the end of 2023, when rents fell by 3.4% year-over-year. While still negative, the rate of decrease is slowing. Absorptions have increased throughout 2024, and as the development pipeline begins to contract, owners and operators should be able to start increasing rents again. Rents are forecasted to begin rising in 2025, starting at an annual rate near 1% in the first quarter and potentially ramping up to around 5% by the end of the year.

Northwest Orlando not only has some of the highest demand levels but was also one of the few submarkets to see rent growth in the current quarter. The highest rent increase overall occurred in the Downtown submarket, at 0.6% year-over-year. Rent trends varied significantly across different property classes. Luxury properties experienced the largest rent declines, at 1.8% over the past year, while mid-tier properties saw a decrease of 0.9%. In contrast, rents for lower-tier workforce properties rose by 0.5% during this period. These factors suggest that there is increased competition in the high-end luxury apartment market.

Submarket Rent & Occupancy

ECONOMY

The regional economy remains strong, with most sectors experiencing job growth over the past year and the unemployment rate remaining relatively stable. In August 2024, total nonfarm employment increased 1.6% year-over-year. The sectors that saw the greatest job growth included construction, with a 6.9% annual increase, followed by other services and education and healthcare, which recorded increases of 5.4% and 3.1%, respectively. The metro area’s current unemployment rate is 3.6%, which is only 30 basis points higher than in August 2023 but below the national average of 4.4% and 30 basis points above its pre-pandemic level for the month. According to CareerSource, employment in the metro area is expected to grow by 8.6% between 2024 and 2032, representing an annual gain of around 17,700 jobs.

23.0K

August 2024 ANNUAL JOBS CREATED

1.6%

AUGUST 2024 EMPLOYMENT GROWTH

3.6%

AUGUST 2024 Unemployment rate
4.4% us August rate

Top 5 Employment Sector
Annual Change

Mining, Logging, and Construction

Nominal Change
from August 2023
to August 2024: 6,700

Percent Change: 3.5%

Education and Health Services

Nominal Change
from August 2023
to August 2024: 5,700

Percent Change: 3.1%

Leisure and Hospitality

Nominal Change
from August 2023
to August 2024: 3,100

Percent Change: 1.1%

Trade, Transportation, and Utilities

Nominal Change
from August 2023
to August 2024: 2,900

Percent Change: 1.1%

Other Services

Nominal Change
from August 2023
to August 2024: 2,800

Percent Change: 5.4%

SectorNominal Change from August 2023 to August 2024 Percent Change
Manufacturing6,2006.9%
Leisure and Hospitality5,7003.1%
Other Services3,1001.1%
Information2,9001.1%
Government2,8005.4%
Education and Health Services1,4000.5%
Mining, Logging, and Construction00.0%
Trade, Transportation, and Utilities-100-0.2%
Financial Activities-100-0.4%
Professional and Business Services-1,200-1.3%
MAJOR ECONOMIC DEVELOPMENTS

CMG Cleantech Energy Park

France-based CMG Clean Tech purchased a 63-acre site in February 2024 with plans to develop an “energy park” that will include research & development facilities, and company headquarters.

Dassault Falcon Aviation Maintenance Facility

Jet manufacturer Dassault Falcon is constructing a 175,000-square foot Falcon service center at Florida’s Melbourne Orlando International Airport, set to open in late 2024.

IRadimed Manufacturing Facility

IRadimed Corporation, a leader in MRI patient care and medical device innovation, is constructing a state-of-the-art 60,000-square-foot facility at the Central Florida Research Park in Orange County.

MARKET OUTLOOK

The Orlando rental market is stabilizing, as a historic wave of new apartments enters the tail end of its cycle. As demand catches up with supply, rent growth and occupancy increases are expected to return. Absorption levels are projected to remain stable through the end of 2024 and into 2025, while the number of units in the development pipeline decreases amid a growing population. Orlando’s population growth, among the fastest in Florida, reached 2.1% in 2023, with approximately two-thirds attributed to renter in-migration. Although interest rates have begun to decline, the cost of homeownership in the metro area remains prohibitive for most renter households. These factors are expected to contribute to higher occupancy rates, particularly for mid- to low-tier properties that face less competition, reducing the need for concessions and enabling effective rent growth.

Sources: Costar; ESRI; U.S. Census Bureau; Yardi Matrix; U.S. Bureau of Labor Statistics

Featured Florida Research Reports:

To gain further insights into the Orlando market, contact our local team:

Matt Ledom - Senior Managing Director

Matt Ledom

Senior Managing Director
Tony Sanicola

Tony Sanicola

Senior Director
Jhamil Moore - Senior Advisor

Jhamil Moore

Senior Advisor
Dennis Nevolo - Senior Advisor

Dennis Nevolo

Senior Advisor
Lance Grisham

Lance Grisham

Senior Advisor
New-Hire

Jason Puckett

Senior Advisor
Zach Croake

Zach Croake

Associate Advisor
Alex Blagojevich

Alex Blagojevich

Executive Managing Director / Co-Founder
Michael-Sullivan

Michael Sullivan

Executive Managing Director / Co-Founder

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