Apartment Construction Boom Takes a Breather

ORLANDO-New nine-month apartment construction activity in Orlando and Tampa is off by at least 50% from its peak 1999 period and may be dropping further in the next two quarters, according to separate research by the Orlando office of Marcus & Millichap and Charles Wayne Consulting Inc. of suburban Maitland, FL.

But the numbers only go to Sept. 1 and don’t include new layoffs, a weakening economy and the effects on construction of the Sept. 11 terrorist attacks and the anthrax scare.

Under construction in the four-county metro Orlando hub in September were 6,511 units, down 21% from March (8,202 units) and down 54% from September 1999 (14,155 units), Charles Wayne Consulting finds.

The firm surveyed 573 apartment buildings comprising 143,000 units. Each building had a minimum 50 units. Government-subsidized and church-backed apartments were not included in the survey.

While construction was down, occupancy is rising. September occupancy is at 92.8%, up from 92.4% in March.

In the Tampa Bay, a first-half report by Marcus & Millichap finds only 6,346 starts were made in the last 12 months, down 45% from its peak two years ago.

“Not since 1998 have starts in Tampa Bay been as low as the 12-month period ending with first quarter 2001,” Steven M. Ekovich, M&M’s vice president/regional manager, tells GlobeSt.com.

In Orlando, Ekovich says the construction decline is in its second year with only 1,100 units started in the first quarter. Second-quarter numbers are being compiled. “This level of construction is down 48% from first quarter 2000 and nearly 80% lower compared with second quarter 2000,” the M&M executive says.

Orlando submarkets with the highest occupancies at 95.2% are west Orange County and the east Orange County/University of Central Florida axis, according to Charles Wayne Consulting.

The Lake Mary/Heathrow/Sanford submarket is the most active with 1,626 units under construction out of the total 6,511 units still going up.