The Latest from MPF Research: Showcasing America’s 7th and 8th Hottest Submarkets
Updates from America’s #1 source of multifamily research data, MPF Research.
In a recent article, we began a countdown of the nation’s 10 most active submarkets for apartment construction with two Texas hot spots: #9 (Far Northwest San Antonio) and #10 (Austin’s Cedar Park).
#8: Central Orlando, Florida
The #8 position goes to Central Orlando – the Orlando metro area. Since 2012 apartment inventory has increased an impressive 68.2%, around 5,000 units. Most of this construction has been recent, with around half of the new inventory still under construction at the end of 1st quarter 2016. Occupancy is at 95.4%, and average monthly rent is around $1,600.
Multi-use buildings make up the bulk of the new construction, combining multifamily housing on upper levels with retail space on lower levels.
The area’s proximity to employment hubs and entertainment districts along with recently improved highways make this a highly desirable area in which to work, live and play. There are also many major developments underway, including sports and entertainment centers, retail shops and new educational establishments.
MPF Research defines Central Orlando as covering downtown Orlando, north to Rose Isle and eastward to include Audubon Park, Colonial Town Center and Baldwin Park. Construction has been most heavily concentrated in Downtown Orlando and Baldwin Park, each with very different characteristics.
Downtown Orlando offers the concentration of amenities you’d expect to find in a city center, a feature that has attracted so many back to metro cores. Some of the most attractive draws were actually only recently developed. Outstanding among these is the Creative Village, a $1 billion development currently underway that will include a brand new university center along with high-tech and media companies. The area also boasts three sports venues: Amway Center, home of the Orlando Magic; Camping World Stadium, recently dressed up with a $200 million renovation; and a new Major League Soccer stadium. Of course, there’s also the usual plethora of retail options (restaurants, shops, theatres) and access to large employers you’d expect to find in any thriving downtown. The high level of investment in the area’s future has driven aggressive development of living space.
Around three miles west from downtown, on land owned by the U.S. military until the 1990’s, is another burgeoning area that’s seeing robust apartment construction. Baldwin Park is a carefully planned community with a decidedly different, more residential/suburban appeal than the downtown area. The top-tier public schools, fine restaurants, parks, walking paths and other amenities are drawing both families and relatively high-income singles to the area, driving strong rents and increasing demand.
View the comprehensive list.
#7: Downtown/Highland/Lincoln Park (Denver), Colorado
Denver’s downtown/Highland/Lincoln Park submarket has an inventory growth rate of 71%. But apartment fundamentals in the area are beginning to fade as the new supply of apartments has yet to be soaked up; over half of new inventory was still under construction in the first quarter of 2016. Occupancy has fallen below 93% in recent quarters and rent growth has slowed to levels well below that of the metro as a whole.
This being said, a host of underlying strengths prime this submarket for outperformance in the long term, providing a window into the reason developers have been willing to build aggressively in the area and wait for a big payoff.
As Colorado’s capitol, Denver is home to state government offices and the chief financial district. Denver is also well known for its top-tier medical centers and strong university system. The startup and tech community ranks fourth in the U.S. Chamber of Commerce Foundation’s list of Top STEM-based Economies in 2015, and Forbes ranked Denver #1 on their list of “Best Places for Businesses and Careers.”
Denver Union Station is a transportation hub feeding into the nation’s eighth largest light rail system. Along with buses, a free shuttle system and extensive bike lanes, it has made getting around incredibly easy for those moving into the downtown area, and has been a major factor in downtown growth.
Nearly 44,000 students attending several academic institutions inject youth and vigor into the downtown area, and the University of Denver is just south of the submarket. Should students choose to stay after graduation, opportunities abound. The majority of large companies in the submarket are located in the central business district, with some companies taking root in Lower Downtown (LoDo) or closer to the universities in Auraria.
Food, entertainment and cultural institutions are also concentrated downtown, creating a draw for those who wish to live where the action is rather than driving to enjoy it.
View the comprehensive list.