Downtown Development Board Community Redevelopment Agency City Hall 400 S. Orange Ave, 6

th Floor P.O. Box 4990 Orlando, FL 32802-4990

p:407.246.2555 f:407.246.3359 www.downtownorlando.com

Introduction:

Downtown Orlando Market Report Summary for Second Quarter 2014 The Downtown Development Board/Community Redevelopment Agency (DDB/CRA) retained Real Estate Research Consultants, Inc. (RERC) to prepare summaries of Downtown Orlando market activity on a quarterly basis. Due to the length of the document, the DDB/CRA prepares a market report summarization to help condense and digest the information found in the full report. Areas that are covered currently include:

Business Growth and Performance

Hospitality and Tourism

Residential Market

Commercial Office Market

Major Downtown Developments

Please note that Major Downtown Developments is the only section that does not originate

from the RERC report. This information is compiled by the DDB/CRA staff through the use of

information gathered by various City boards, along with communications with project

representatives.

If you have questions regarding the information contained herein, or to request a copy of the full RERC report, please contact Mercedes Blanca at 407.246.3625 or at Mercedes.Blanca@DowntownOrlando.com.

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Downtown Orlando Market Report Summary for Second Quarter 2014

Business

During the second quarter of 2014, 81 businesses opened, of which 38% were professional

establishments. Total employment numbers within CRA boundaries are currently 74,324, with the

three largest contributors being educational services (22,183); public administration (16,009); and

professional, scientific, and technical services (10,395).

Total sales tax collection within the CRA for the second quarter of 2014 was $15,112,083, which is a

3.53% increase over year-over-year’s $14,596,518 and a 3.85% increase over last quarter’s

$14,551,724. Commercial rent ($2,714,541) and restaurants ($2,402,448) are the current sales tax

collection leaders, which reflect the general volume of gross sales. However, the increase in sales

tax collections from hotel and motel accommodations is noteworthy with a 4.8% or $771,523 year-

over-year change, bringing total sales tax collected for these businesses to 13% or $1,966,924. It

should be noted that not all sales are subject to sales tax. Examples of transactions in which sales

tax is not collected include the purchase of groceries and medication, along with certain services.

See Figure: Figure 1: Top Ten Sales Tax Collections by Type of Business within the CRA

Hospitality and Tourism

At 75.3%, Downtown Orlando’s year-over-year hotel occupancy levels have increased by 2.1%.

During the second quarter of 2014, there were 100,000 guests lodged in Downtown hotels which

was 4,000 guests short of last year’s number. This decrease is thought to be the result of the

Sheraton Orlando Downtown’s closure. This building is undergoing an extensive renovation and is

proposed to reopen as the Renaissance by Marriott in the second half of 2015.

With an average daily rate (ADR) of $135.47, Downtown continues to lead the market when

compared to Metro Orlando’s various submarkets, Orange County, and the City, which have ADRs

of $112.79 (submarket average), $121.03, and $118.61, respectively. In addition, Downtown’s

ADR has increased by $8.94 or 7.07% when compared to the same time last year.

See Figures: Figure 2: Hotel Occupancy Comparison Figure 3: Hotel Room Average Daily Rate Comparison

Residential Market

Downtown Orlando’s residential market had an impressive quarter with a 19% increase in sales

price per unit compared to the same quarter one year ago. Condominiums, which make up the

majority of the Downtown residential market, experienced a year-over-year increase of 20.5% with

an average sales price per unit of $304,758. The strength of the Downtown condo market is further

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demonstrated when comparing it to Orange County’s and the City’s averages of $137,099 and

$127,719, respectively.

The rental market within Downtown Orlando continues to perform strongly with occupancy rates

averaging 93.8%. This average rate includes SkyHouse which is in its initial lease up stage and had a

69% occupancy rate at the end of the second quarter of 2014, but has since increased to about 95%

occupancy. Of the 10 apartment buildings for which statistical information was obtained, eight of

the ten have experienced increases in occupancy. The remaining two buildings, Post Parkside and

Uptown Place, have held steady with strong rates of 98% and 95%, respectively.

When compared to year-over-year figures, apartment rental rates are trending in a positive

direction. Average monthly rental rates are $1,517 or $1.83 per sq ft which are $22 per month and

$0.23 per sq ft higher than last year’s rates. The Paramount has the highest average rates with

$2,242 per month and $2.05 per sq ft.

See Figures: Figure 4: Average Residential Sales Price Figure 5: Total Residential Sales, Downtown CRA Planning Areas by Average Price per Unit Figure 6: Occupancy of Major Apartment Buildings in Downtown Orlando CRA Figure 7: Average Rental Price per Square Foot, Major Apartment Buildings in Downtown Orlando CRA

Commercial Office Market

Downtown Orlando experienced 121,442 sq ft of commercial office gross absorption in the second

quarter of 2014, which is lower than last quarter’s 149,596 and the year-over-year 193,310 sq ft.

However, 52% of office space absorption in the City of Orlando took place within Downtown.

Where the Downtown area separates itself in the local market, is in its $21.61 per sq ft average

rental rate, which is higher than Orange County’s $19.13 per sq ft and the City’s $19.56 per sq ft.

This can be partly attributed to the greater proportion of Class A space in Downtown. In regards to

rental rates, Downtown experienced a decrease when compared to year-over-year’s and last

quarter’s numbers of $21.72 and $22.06, respectively. However, the same pattern was uncovered

at the City level.

When compared to downtowns of a similar size in Florida, such as Tampa, Downtown Orlando is

lagging slightly behind. At $21.61 per sq ft, the rental office market in Downtown Orlando is

currently $0.81 per sq ft less than that of Tampa, and with an occupancy rate of 85.2%, it is trailing

behind downtown Tampa’s 89.2%.

See Figures: Figure 8: Office Vacancy Rate Comparison within Downtown Orlando CRA Figure 9: Average Office Rental Rate per Square Foot within Downtown Orlando CRA Figure 10: Office Space Distribution as Percentage of All Classes Figure 11: Comparable CBD Office Buildings, Percent Occupancy Figure 12: Comparable CBD Office Buildings, Rental Rate per Square Foot

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Major Downtown Developments There are currently 19 projects underway representing approximately $2.72 billion ($1.24 billion

private and $1.48 billion public) in investment. These projects include nearly 2,768 residential units,

463 hotel rooms, 200,889 sq ft of retail space, and 1,290,038 sq ft of office space. In addition, there

are 10 proposed projects that represent about $2.34 billion ($41.6 million private and $2.3 billion

public) in investment. These projects will include roughly 1,009 residential units, 504 hotel rooms,

99,600 sq ft of retail space, and 280,000 sq ft of office space.

Downtown Projects - In Progress

Downtown Projects – Proposed

Project Investment

Residential

Units Hotel Rooms Retail (sq ft) Office (sq ft) Other (sq ft)

331 Cathcart Ave $1,200,000 5 - - - -

Artisan 420 $60,000,000 300 - 6,650 - -

800 N Orange

Ave TBD - - - 21,900 -

801/811 N

Magnolia TBD - - - 7,778 -

Central Station

$50,000,000

(Phase 1) 279 125 14,680 260,360 -

Church Street

Streetscape $16,000,000 - - - - -

Citrus Bowl

Reconstruction $207,700,000 - - - - 1,200,000

Creative Village $1,000,000,000 1,500 200 150,000 1,000,000 525,000

Dr. Phillips

Center $500,000,000 - - - - 365,700

Lexington Court

$17,800,000

(Phase 1) 104 - 6,559 - 22,543

Lymmo BRT

Expansion $24,000,000 - - - - -

Men's Service

Center $6,600,000 - - - - 33,000

MLS Soccer

Stadium $110,000,000 - - - - -

NORA $28,000,000 246 - 10,000 - -

Renaissance Hotel

Renovation $17,000,000

Residence Inn $27,000,000 - 138 4,000 - -

Sunrail $615,000,000 - - - - -

The Sevens $35,000,000 334 - 9,000 - -

Trinity Lutheran

CDC $7,100,000 - - - - 26,764

(Totals) $2,722,400,000 2,768 463 200,889 1,290,038 2,173,007

Project Investment

Residential

Units Hotel Rooms Retail (sq ft) Office (sq ft) Other (sq ft)

Ace Café TBD - - 18,000 - -

Cambria Suites TBD - 155 3,300 - -

Citi Tower $40,000,000 235 - 22,300 - -

Citrus Center

Improvements $1,600,000 - - - - -

Gertrude's Walk $1,500,000 - - - - -

Hyatt Place TBD - 205 - - 4,312

Interstate 4

Improvements $2,300,000,000 - - - - -

Orlando Sentinel

Complex TBD 746 144 56,000 280,000 -

Sports Entertain.

District TBD - - - - -

Thornton Park

Brownstones TBD 28 - - - -

(Totals) $2,343,100,000 1,009 504 99,600 280,000 4,312

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Sources: Real Estate Research Consultants and Development Contacts