Commercial Real Estate, Capital, Insurance, Leasing & Management

Industry Outlook: Here’s a solution to Orlando’s permitting problem, city official says

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Yvonne Baker, regional managing partner with Franklin Street, discusses Orlando's office space development outlook.

Excerpted from Orlando Business Journal story.

Bo Bradford started seeking a building permit from the city of Orlando at the beginning of August for a 1,600-square-foot speculative office space.

As of Oct. 8, the co-president of Lee & Associates-Central Florida still was awaiting a response. “We don’t even have the first round of comments yet,” Bradford said.

In fact, many of more than a dozen executives agreed, as they discussed Orlando’s current permitting pileup during Orlando Business Journal’s Oct. 8 Commercial Real Estate Industry Outlook at Lynx Central Station.

The issues coincide with a massive construction boom in Central Florida, where developers have been drawn to the area’s exploding population and job growth. The combined building permit values in the metro Orlando area added up to $5.82 billion through August this year, according to the most recent Dodge Data & Analytics report.

The city has been attempting to streamline its process, though, with things such as an online portal to submit plans digitally.

But the online portal isn’t helping speed things up much, said Yvonne Baker, regional managing partner with Franklin Street.

Part of the issue with the online portal is the city waited too long to shift from a paper-based to an electronic system, said Jim Gray, who represents southeast Orlando on the Orlando City Council and is the head of CBRE’s (NYSE: CBRE) Central Florida operations.

Gray encouraged panel attendees to continue to voice complaints to the city.

“We tried to do it right in the middle of what has turned out to be a boom for everybody,” he said of moving the permitting process online. “We’ve not done a good job keeping up, but I think we’re getting there now.”

One potential solution may come from the private sector, Gray said. Rather than rely on city officials, some municipalities have allowed professional consultants such as architects and engineers to review plans and assure they are up to code. Cities then can focus on life safety issues as they relate to those project plans.

Still, it may be unfair to put all the permitting problem onus on the city. Central Florida continues to experience a robust amount of construction and it would be hard for any one agency to keep up with all that activity, Bradford said.

Closer Look
Where are you seeing commercial activity? 

Maitland office submarket 

Why: Office vacancy rates were hovering around 20 percent about four to five years ago. But now, vacancy is 9.3 percent — or near Orlando’s average of 8.6 percent, according to a third-quarter Cushman & Wakefield (NYSE: CWK) report. “It’s a submarket that’s always struggled in bad economies and taken longer to catch up,” said Greg Morrison, principal and managing director of commercial real estate firm Avison Young Inc. in Orlando. “It’s a nice surprise.” Maitland typically is more affordable than other submarkets in Orlando, with Class A rents averaging $20.45 per square foot.

Clermont, Hamlin office submarkets

Why: Several new office developments are in the area now, showing that millennials want to work in places where they also live and play. “We have to have some office component out in those markets,” said Yvonne Baker, regional managing partner with Franklin Street.

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