|Vacancy Rate||Effects of New Construction||Outlook for 2015|
|Multifamily||In 2014, we hit a rental vacancy rate of 4.4%.||In 2014, the local market added 3300 units. In 2015, we have 6500 units coming online — and we still haven’t met demand.||Current stats predict a 4% increase in rental rates for apartments. However, local market experts predict a 5-6% increase, with additional room for expansion in future years.|
|Office||Office space still has a vacancy rate of approximately 12%.||Developers are still a little hesitant, but large built-to-suit developments for companies such as Verizon and Deloitte are creating a visible impact; we’re 250 bps below our vacancy peak.||Tenants are filling spaces much more quickly. We should see vacancies down to about 9% this year, producing a landlord-friendly climate and stable or rising rents.|
|Industrial||Vacancies dropped by about 40 bps.||Our market added 100,000 sf in the last two quarters of 2014. Projects totaling almost 700,000 sf are underway for delivery in 2015.
A major employer, Zenith Global Logistics, opened a new warehouse in the Beachline Expressway area, boosting developer optimism as they see a healthy industrial sector with investors actively looking to complete transactions.
|In 2014, rents rose about 4.8% Y/Y and asking rents are up by about 6% Y/Y. Low vacancies will add pressure to rents and tenants will compete for existing space.
Sales prices have also returned to normal levels. As inventory comes back on board, you’ll start to see the sales price per foot creep back up.
|Retail||Vacancies are low; in 2014 we saw vacancies decrease by 60 bps Y/Y.||In 2014, developers delivered 660,000 sf to the retail market.
We currently see a lot of preleasing in new construction, and there’s a strong demand for more retail space.
|Orlando to Tampa is a heavily retail-dominated market, and it was very active in 2014. In the retail market from Tampa to Daytona Beach along the I-4 corridor, vacancies are low and rents are beginning to increase.
In 2015, we expect more construction in the Central Florida marketplace. Investors can still get into deals at a reasonable cost, and plenty of financing is available.
Table 1: Top investment property products in the Tampa-Orlando markets. Insights from Justin West, Regional Manager, Orlando