Rental rates and per unit pricing continue to rise as population growth creates strong demand for Central Florida multifamily
Multifamily Rent Trends:
Tampa Bay: Of all the Central Florida multifamily markets included in this report, Tampa-St. Petersburg experienced some of the sharpest increases in rental rates. Starting the year, Q1-22 rent per square foot was $2.13 for Class A, $1.79 for Class B, and $1.53 for class C.
Orlando: Rental rates in the Orlando MSA have also experienced very strong growth, fueled by heavy migration patterns. In Q1-22, Class A space achieved $1.94 per square foot, while Class B and C space followed respectively at $1.73 and $1.57 per square foot.
Daytona: Rental rates saw modest growth in Q1-22 within the Deltona-Daytona Beach MSA. Class A space was valued at $1.74 per square foot, Class B space was valued at $1.49 per square foot, and Class C space was valued at $1.38 per square foot. While Daytona is not as large as Orlando and Tampa-St. Petersburg regions, the area is benefitting from similar population growth patterns, which positions it well for continued rent growth.
Multifamily Supply & Demand
Tampa Bay: The availability of housing in Tampa and St. Petersburg has been an issue for renters. Deliveries of new multifamily units continue to struggle to keep pace with demand. However, Q1-22 did see over 2,000 new multifamily units delivered to the market, which led to a slight uptick in vacancies. The market ended Q1 with a vacancy rate of 4.81%, over a 40-basis-point increase from Q4-21. Given population growth trends, these units will likely be absorbed quickly.
Orlando: Supply and demand within the Orlando MSA appears to have reached a temporary state of equilibrium. Vacancy rates have stayed relatively flat over the past three quarters, floating around the mid-5% range. Q1-22 closed with a vacancy rate of 5.42%, as abortion and new deliveries remained fairly even.
Daytona: Rental rates saw modest growth in Q1-22 within the Deltona-Daytona Beach MSA. Class A space was valued at $1.74 per square foot, Class B space was valued at $1.49 per square foot, and Class C space was valued at $1.38 per square foot. While Daytona is not as large as Orlando and Tampa-St. Petersburg regions, the area is benefitting from similar population growth patterns, which positions it well for continued rent growth.
Central Florida Multifamily Market Outlook
Central Florida will continue to be an incredibly attractive location for multifamily investment throughout 2022. The largest factor contributing to the area’s success is the high migration patterns into Tampa and Orlando. With so many people moving into the area, prices and rents will continue to rise. Although national economic conditions are experiencing mild turbulence from international geopolitical events and a lingering pandemic, Central Florida seems to be somewhat insulated. Employment has quickly recovered, and Covid-19 related restrictions have been lifting slowly. Finding investments that provide high yields in today’s market can be tough, but multifamily investment will remain a safe bet for investors.
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