Orlando remains a bright spot in Florida's retail market, with continued job growth and tourism dollars making up for a drop in housing prices, according to the nationalfirm NAI Global.
Local employers will create 24,000 new jobs in 2007, says a market report from the national brokerage firm Marcus & Millichap Real Estate Investment Services, representing an increase of 2.2 percent — above the national growth average of 0.9 percent. Meanwhile, 48.8 million people are expected to visit Orlando this year, a slight (1 percent) increase over 2006, when an estimated 48.3 million people passed through the area, according to a study commissioned by the Orlando/Orange County Convention & Visitors Bureau, Inc.
Those numbers will buoy retail demand, with an expected 5.3 percent increase in average rents to $17.40 per square foot. But a large influx of new construction will push up vacancy rates, note the researchers from Marcus & Millichap. In the past 12 months, 2.3 million square feet of retail space was added to the market and, as a result, vacancies in the area will rise 40 basis points to 8.5 percent.
“The retail market is still strong. Vacancy is staying in the market a little bit longer, so we are seeing some signs of the market softening, but I am doing more [sales]than I've ever done in the past,“ says Nicholas Ledvora, associate agent with the Marcus & Millichap office in Orlando.
Currently, high vacancies present the greatest problem for neighborhood service centers in and around Orlando, where they average 9.1 percent, according to NAI Global. The lowest vacancy rates are found at regional malls, with 1.2 percent, and community power centers, with 2.1 percent.