ORLANDO, FL – Projected job losses in Orlando will contribute to an increase in vacancy and virtually flatten rent growth, but some positive trends will emerge throughout 2009, according to the 2009 National Apartment Report by Marcus & Millichap, the nation’s largest real estate investment services firm. “Investment activity is expected to remain slow in the early part of 2009,” says Bryn Merrey, regional manager of Marcus & Millichap’s Orlando office.
“Despite the effects of we
akening economic growth, investors are optimistic about the area’s long-term prospects and more robust apartment fundamentals in the quarters ahead.”
akening economic growth, investors are optimistic about the area’s long-term prospects and more robust apartment fundamentals in the quarters ahead.” Following are some of the most significant aspects of the Orlando Apartment Research Report:
· Led by reductions in the professional and business services and financial activities sectors, total employment in Orlando will fall by 10,600 workers this year, a 1 percent decrease. In 2008, employers cut 15,800 jobs.
· In 2009, developers are slated to complete 2,200 apartments, down from 2,700 units last year. Multi-family permit issuance is expected to decline from about 6,000 units in 2008 to 4,000 units this year as construction pipelines are adjusted.
· The average vacancy rate is projected to increase 120 basis points in 2009 to 10.7 percent. Last year, a rise in completions resulted in a 240 basis point vacancy spike.
· Asking rents are expected to advance 0.3 percent this year to $883 per month. Effective rents are forecast to drop 1.6 percent to $805 per month as owners offer greater concessions to attract renters.
· Due to the recent slowdown in transaction velocity, buyers may be able to negotiate favorable terms in the early part of 2009. This trend will be most evident in sales of fractured condo conversions across the metro area and in deals involving recently built properties with low occupancy, especially near major employers in southern Orange County.
Also included in the report is the firm’s annual National Apartment Index (NAI), a snapshot analysis that ranks 43 apartment markets based on a series of 12-month forward-looking supply and demand indicators.
Orlando moves down six places this year to No. 32. San Francisco retained the top position in this year’s NAI, supported by the strongest effective rent growth in the ranking.
San Diego climbed six places to No. 2, due to the lowest vacancy rate of the markets covered. Washington, D.C. moved up six places to No. 3. Los Angeles checked in at No. 4, and Seattle moved up three places to claim No. 5. Two Midwestern markets, Minneapolis-St. Paul and Milwaukee, posted the most significant upward moves in the index.
For a copy of Marcus & Millichap’s National Apartment Report and the complete NAI rankings, visit http://www.marcusmillichap.com/.
Press Contact: Stacey CorsoCommunications Department(925) 953-1716
