- Orlando construction activity is down 65.9% from its 2023 peak and 40% year over year, and net absorption has outpaced completions for the first time since 2021.
- The metro grew 11.5% from 2021 to 2026, nearly double Miami’s 6.8%, with average rents of $1,828 well below Miami’s $2,773.
- Recovery is uneven: I-Drive sits at 88.3% occupancy with the biggest pipeline, while Eastside, North Orlando and Windermere top 93% with no deliveries.
The Orlando multifamily market is recovering from an oversupply hangover as construction slows, rent growth bottoms out and demand starts to absorb the apartment glut, according to The Real Deal.
Investors and developers expect stabilization backed by population and job growth, but they are being selective.
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The Oversupply Hangover
Orlando supply exploded after the pandemic, when rents rose nearly 20% in a single year, said Cushman & Wakefield’s Mike Donaldson. Completions outpaced demand, occupancy dipped and landlords offered concessions as rents turned negative.
Construction is now down 65.9% from its 2023 peak and 40% year over year. About 3,000 units delivered in the second quarter, a 10.4% drop from a year earlier, and the market has absorbed nearly 6,400 units so far this year.
Demand Drivers Hold
Orlando led Florida in population growth at 11.5% from 2021 to 2026, per Cushman & Wakefield, versus 6.8% for Miami, 6.6% for Palm Beach and 5.8% for Fort Lauderdale. The average Orlando rent is $1,828, against $2,773 in Miami and $2,500 in West Palm Beach, per RentCafe.
The metro added 16,000 jobs in the first four months of this year, compared with 18,500 over the previous two years combined, per Marcus & Millichap. Growth now extends beyond Disney into distribution, manufacturing, tech, defense and health care.
Submarkets Diverge
I-Drive Orlando had 88.3% occupancy and more than 2,500 units in the pipeline in the second quarter, the most of any submarket. South Orlando, parts of Kissimmee and Southwest Orlando also faced pressure.
Eastside, North Orlando and Windermere posted occupancy above 93% with no new deliveries. Berkadia’s Cole Whitaker said properties near strong employment centers are outperforming suburban commuter assets.
Why It Matters
Marcus & Millichap said effective rents began rebounding early this year after three straight annual declines and expects modest rent growth by year-end. Concessions stayed near post-pandemic highs in the first quarter, mostly in mid- to lower-tier buildings.
Lenders are returning to select projects. Beachwold secured a $176.6 million construction loan for The Place at Alafaya, the largest private residential construction loan in Orlando history, per JLL. The recovery fits a broader picture of improving multifamily fundamentals nationally.
What’s Next
Donaldson expects development to keep declining for three to five years because projects are hard to pencil at current rents. Hedrick Brothers landed a $56.5 million loan for a 366-unit Kissimmee project set to open in 2028.
Whitaker said rising interest rates over the past 18 months have hindered investment, but he expects reduced construction to tighten rent rolls and draw buyers back.
