Multifamily Market Growth in Orlando, FL: A Promising Opportunity

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Orlando, Florida, known as the “Theme Park Capital of the World,” has long been a popular tourist destination. However, in recent years, it has also emerged as a thriving multifamily real estate market. It attracts both investors and residents alike. Orlando has had many challenges posed by the COVID-19 pandemic and its heavy reliance on tourism. Despite this, Orlando has continued to perform well in terms of population growth, job creation, and rental demand. In this article, we will explore the factors that have contributed to the growth of the multifamily market in Orlando. We will explore why it presents a promising investment opportunity.

The Strong Foundation: Population and Job Growth

One of the key drivers of the multifamily market in Orlando is its robust population growth. According to recent data, the city has experienced a population increase of 10.4% in the past year, well above the national average of 3.8%. This influx of new residents has created a strong demand for rental housing, ensuring a steady renter pool and driving the need for increased inventory.

In addition to population growth, Orlando has also seen significant job creation. The city boasts a job growth rate of 4.5%, surpassing the national average of 3.0%. With a diverse economy that includes industries such as tourism, hospitality, education, and healthcare, Orlando offers a wide range of employment opportunities. This favorable job market has not only attracted new residents but has also contributed to the stability of the multifamily market.

The Rental Market: Demand and Rent Growth

The rental market in Orlando has experienced strong demand, driven by both in-migration and individuals who have been priced out of the single-family home market. Despite the impact of the pandemic, the city has seen year-over-year rent growth of 9.5%, outpacing the national average. The average rent in Orlando currently stands at $1,790 per month, significantly higher than the national index of $1,630.

However, it is important to note that the pace of rent growth has been normalizing in recent months. While the market has witnessed astronomical rent increases in the past, the current growth rate is expected to stabilize. This is due to the introduction of new supply and the need to maintain affordability for renters. Developers have recognized the demand for rental housing in Orlando and have responded by adding 23,000 units to the pipeline. Although this additional supply will help balance the market, it may take time for the equilibrium to be reached.

Investment Activity: Sales Volume and Cap Rates

Orlando’s multifamily market has also seen significant investment activity, with strong sales volume and declining cap rates. In the past 12 months, the city has recorded 100 property trades totaling $6.7 billion in investment volume. This highlights the attractiveness of the market to investors, who recognize the potential for growth and solid fundamentals.

The average price per unit in Orlando has increased by over 20% to $270,000/unit. This reflects the intense investment activity in the city. Rising interest rates and mounting pressure on cap rates are factors to consider. In spite of this, the demand for multifamily investments in Central Florida remains strong. Private equity firms and joint venture groups from across the country are actively seeking opportunities in Orlando, resulting in increased competition for multifamily assets.

Market Outlook: Supply and Demand Dynamics

As the multifamily market in Orlando continues to grow, the balance between supply and demand becomes crucial. While there has been a surge in new supply, with 7,791 units delivered in the past year, demand has remained strong, absorbing approximately 2,800 units. The vacancy rate currently stands at 7.7%, and it is expected to fluctuate between seven to nine percent in 2023 as additional supply is added to the market.

Developers are actively building new projects across the Orlando metropolitan area, with a focus on areas such as Maitland/Winter Park and the urban core. However, the overall new supply picture appears to be balanced, with projects spread throughout the metro. While some submarkets may face short-term supply pressure, the market is expected to absorb the current construction pipeline fairly well.

While Orlando has experienced strong traffic and leasing activity, occupancy rates have struggled in recent months. Across the metro, occupancy has declined by an average of 1.81% since the previous year. Only the southern end of Osceola County has seen rising occupancy, while submarkets such as Kissimmee and Lake County have experienced significant declines.

Net effective rent on a same-store basis in Orlando has also fallen by 1.3% in the past year. While some submarkets have seen rent growth, others have experienced declines. The South Central submarket, in particular, has lagged behind, with a 5% decline in net effective rent. As a result, concessions have increased by 58% market-wide, reflecting the need to attract and retain tenants in a competitive market.

The employment market in Orlando, like many other cities, was initially impacted by the COVID-19 pandemic. However, it has since rebounded, and the current unemployment rate stands at a healthy 2.3%. Orlando’s economy has a significant concentration of leisure and hospitality workers, making it vulnerable to fluctuations in the tourism industry. To mitigate this risk, the city has been diversifying its employment market and attracting corporate relocations from other regions. Florida’s business-friendly policies and favorable economic environment continue to support job growth in the area.

Conclusion: A Promising Investment Landscape

In conclusion, the multifamily market in Orlando, Florida, offers a promising investment landscape. Strong population and job growth, coupled with steady rental demand, have contributed to the market’s resilience and attractiveness to investors. Despite the challenges posed by the pandemic and the city’s reliance on tourism, Orlando has shown remarkable stability and growth in its multifamily sector.

Investment activity remains robust, with significant sales volume and declining cap rates. The market outlook is positive, with a balanced supply and demand dynamic and ongoing development to meet the growing rental demand. While occupancy rates and rent trends may fluctuate in the short term, the long-term prospects for the Orlando multifamily market are promising.

For investors looking to capitalize on the growth potential of the multifamily market, Orlando presents a compelling opportunity. With its strong fundamentals, diverse economy, and favorable investment climate, Orlando is well-positioned to continue its upward trajectory in the years to come.

Here are some useful websites with information on the Orlando multifamily real estate market:

  1. Yardi Matrix (
    Yardi Matrix is a leading provider of multifamily property data and market intelligence. Their Orlando market page provides detailed information on occupancy rates, rental rates, new supply, and market trends.
  2. Marcus & Millichap (
    Marcus & Millichap is a commercial real estate brokerage firm that publishes quarterly market reports on various markets, including Orlando’s multifamily sector.
  3. Cushman & Wakefield (
    Cushman & Wakefield’s Orlando multifamily market page provides insights, research reports, and market statistics on the local multifamily industry.
  4. REIS (
    REIS is a leading provider of commercial real estate data and analytics. Their Orlando market page includes multifamily market trends, forecasts, and property-level data.

These websites can provide valuable insights into the current state of the Orlando multifamily market, including rental rates, occupancy levels, new construction, and market forecasts.

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