Orlando is as far from being a one-horse town as a city can be, and it is only getting further. Sure, hospitality does remain a huge driving force of this Central Florida theme-park mecca’s local economy. The city welcomes some 70 million tourists each year. And yet Orlando is also emerging as a top metro for job and population growth — landing the region on the radar for retail and restaurant expansion.
Lake Nona Town Center
“The Orlando market in general has been fantastic from a retail perspective,” said James Mitchell, a locally based senior executive with CBRE. Indeed, the local vacancy rate is at 4.3 percent, according to CoStar data, with about 1 million square feet of new retail space now under construction. Orlando has seen several projects announced over the past few years. But the current climate is different from the last upturn, in 2004–2007, when a lot of big-box retailers were driving the activity, notes Mitchell. This recent wave of development has involved smaller in-fill and mixed-use projects as well as tourist-driven ones. Furthermore, a lot of areas are getting redeveloped to accommodate better and higher-use retailers, he says.
“People spend their days at the parks and then go back to their condo or hotel, and they don’t want to stop enjoying their vacation”
“Orlando is an interesting city in that we are very diverse in our retail market,” said Cindy Schooler, managing principal and market leader at the Orlando office of SRS Real Estate Partners. The city is characterized by its retail sprawl and by its robust suburban submarkets that support both the residential population and a steady flow of tourists, she says.
Discount retailers such as Burlington, Marshalls and T.J.Maxx have been leading the charge on some of the new neighborhood retail centers. Meanwhile, projects geared toward the tourist market are heavily focused on experiential, dining and entertainment. “People spend their days at the parks and then go back to their condo or hotel, and they don’t want to stop enjoying their vacation,” Schooler said. Tourists are looking for that last event or meal of the day, she says, and the centers located near those tourist corridors are focusing on a strong entertainment component to help them compete for the tourist dollar.
Vineland Pointe, a joint development of O’Connor Capital Partners and LaSalle Investment Management
As vibrant a catalyst for local growth as the hospitality and amusement-park elements have long represented, there seems to be even further expansion ahead. Universal Orlando Resort acquired 100 acres near the Orange County Convention Center and is now developing a themed amusement park set to open in the latter half of 2020. The project is anticipated to help bring even more jobs and ancillary development to that section of the city. Orlando has also tried hard to diversify its economy, and the city is now seeing those efforts begin to pay off in growth within such sectors as digital media and the life sciences.
According to the Orlando Economic Partnership, the region is among the top markets in the country for both population and job growth. Moreover, retailers that have tended to bypass the urban core in favor of the suburbs are now discovering that Downtown Orlando is emerging as an 18-hour city. The downtown now serves about 80,000 daytime workers and has also seen exponential growth in its residential population in recent years, to about 18,000. “That residential growth has put us on the radar of numerous national retailers that are now looking at the downtown as a submarket where they need to have a presence,” said David Barilla, assistant director of the Orlando Downtown Development Board. “As we continue to get more people living and working here, obviously, the retail opportunities will follow.”
Currently, some $3.5 billion in new investment in the center city is either under way or else proposed, notes Barilla. One of the exciting additions is a new campus for the University of Central Florida that is part of the Creative Village mixed-use redevelopment. The campus opened officially only this summer and is set to welcome about 7,700 students in the fall. “What that is effectively doing,” Barilla said, “is, with a turn of the faucet, so to speak, creating a whole new demographic of individuals that we are adding to our downtown.”
Creative Village is a $1 billion redevelopment of the former Amway Arena site into a nearly 70-acre mixed-use, transit-oriented, urban in-fill neighborhood in the downtown. The vision for Creative Village is to create a live-learn-work-play urban destination comprising office, creative studio, retail, mixed-income residential, and K–12 and higher-education space. The new college campus is the centerpiece. Several other projects are moving forward too, including a 600-bed student-housing property that is now under construction and which will contain some ground-floor retail space. Development of this site will be ongoing for the next 10 or 15 years.
A mixed-use sports-and-entertainment district development sits on an 8.4-acre site adjacent to the new Amway Center indoor arena — where the Orlando Magic NBA team plays. The basketball team’s owners purchased the site with an eye toward building a 100,000-square-foot corporate headquarters. Plans also include the addition of a hotel and some residential, retail and expo space. The retail space is to be like that of the L.A. Live project, in Downtown Los Angeles, and the idea is to include strong entertainment and experiential retail elements to complement attendance at the Amway Center’s events. The project is moving forward with new development set to occur in phases.
Lake Nona Town Center, part of the master-planned Lake Nona community, southeast of Orlando and adjacent to the Orlando International Airport, will comprise 4 million square feet of shopping, dining and entertainment space across 100 acres at completion. The first phase opened last year, and that included a Marriott hotel component, plus offices, retail and restaurants. The second phase is now under way for a mix of local and national retailers and food-and-beverage tenants. Among the announced additions are a fitness facility and a cinema. The center is to feature nearly 100 specialty retailers, anchors and restaurants. Tavistock Development Co. is developer of both this project and the 17-square-mile Lake Nona community.
Vineland Pointe, a joint development of O’Connor Capital Partners and LaSalle Investment Management, sits on 70 acres along the Daryl Carter Parkway, a half mile from Orlando Vineland Premium Outlets. The 225,000-square-foot first phase, which opened in time for the 2018 holiday shopping season, offers off-price retailers Burlington, Marshalls and Ross Dress for Less. Work has commenced on the second phase, which is to comprise roughly 115,500 square feet of entertainment uses, including an Alamo Drafthouse movie theater. The first tenants of this second phase are slated to open sometime this winter. A third phase will present roughly 136,000 square feet of lifestyle tenants.
By Beth Mattson-Teig
Contributor, Shopping Centers Today