A demographic shift may create a new demand for luxury apartments near Disney.
Historically, Kissimmee has been known as a blue-collar area packed with tourism jobs revolving around theme parks. But there’s been a lot of other activity lately that could change its landscape, local multifamily experts said.
And the first luxury apartment complex to break into the market is the estimated $54 million, 326-unit Millennium at Citrus Ridge south of Highway 192 in Kissimmee near Walt Disney World and the future Margaritaville. The complex is being developed by Aventura-based project developer and general contractor DLC Residential LLC, which expects to start construction this March and wrap up by September 2018.
The project appears to be driven by the area’s job growth.
“Kissimmee is a market moving toward more white-collar, higher-paying jobs,” Shelton Granade, a vice chairman of CBRE Inc.’s investment properties group, told Orlando Business Journal.
Some of the projects expected to cultivate those higher-wage jobs include hospital/medical facility expansions, including the city of Kissimmee’s Medical Arts District, which launched last spring; Tupperware Brands Corp.’s (NYSE: TUP) continued work on a new mixed-use development near a future SunRail commuter rail station; and more retail and residential growth around The Loop and The Crosslands shopping centers.
Plus, the highly anticipated $75 million BRIDG — the 109,000-square-foot, two-story Florida Advanced Manufacturing Research Center — will be completed in March and is giving rise to a surrounding high-tech campus.
“With all that coming in, there’s going to be a market for luxury apartments out there,” Granade said. “Does that mean they should build 10 of these projects right now? Probably not. But to have a project coming online right now to meet that demand of higher-paid jobs, I think it could do very well. It’s kind of underserved right now.”
BRIDG is expected to be the thing that will trigger Kissimmee’s transformation to being more white collar, added Jay Ballard, senior director of multifamily for Cushman & Wakefield in Orlando.
And it may drive developers to strive to be among the first in the area to bring in upscale rental properties with little competition.
“That’s going to be a huge shot of adrenaline for that change, but it’ll take one to four years for the net effect of it,” Ballard told OBJ. “It’ll support the demand for more and newer apartments, because historically a lot of the older properties in that area are lower Class B, B-minus, even C-plus projects.
“With the expansion of BRIDG and higher wages, there will be a greater demand for new, Class A product.”
Central Florida overall has a growing demand for apartments, and the Kissimmee submarket is in line with that. The submarket had a 94.8 percent apartment occupancy rate and the second-highest, sixth-month absorption rate in metro Orlando with 721 units, according to the most recent report from Charlotte, N.C.-based Real Data Inc..
The Kissimmee submarket also had a $1,128 average monthly rental rate, just $15 shy of Metro Orlando’s rate, the Real Date report said.
“That West 192 area’s personality is continuing to evolve and change,” Ballard said. “The Margaritaville project and Disney opening up that back door continues to change that area.”
The big picture
Tavistock Development Co. LLC released new renderings of one of its latest Lake Nona projects, the 348-unit Ariel Apartments complex.
Construction began last fall and is expected to be completed by second-quarter 2018.
Birmingham, Ala.-based WeldenField is the project partner, Walker & Co. Inc. is the general contractor, and Fugleberg Koch PLLC is the architect.
See more at http://bizj.us/1p1ukh.
On the market
What: Winter Park-based Great American Land Management Inc.’s related CVJCR Properties Ltd. LLLP is selling Orlando Executive Park. The 7.6-acre site has three vacant office buildings totaling 98,404 rentable square feet, as well as vacant land zoned for automotive, hotel, retail or office redevelopment.
Where: Diplomat Circle on the northwest corner of Lee Road and Interstate 4 next to the Home Depot in Orlando
Listing agents: CBRE Inc.’s Ron Rogg and Chip Wooten
Contact: (407) 839-3194; ron.rogg@cbre.com
Why it’s hot: Few mixed-use commercial land sites are available for sale along I-4, and this is the largest redevelopment site remaining, according to marketing materials. The property also has more than 560 feet fronting I-4 and is about five minutes away from Orlando’s central business district.