Central Florida Multi-Tenant Retail Market Report
Orlando, FL, Market Overview
Demand for retail space in Orlando continues to be strong despite persistent economic worries at the national level. The robust retail market in Orlando is driven by a consistently high rate of population growth, surpassing that of Florida’s other primary markets. Orlando boasts the fastest population growth among the state’s six main markets, and employment in the retail trade sector is more than five times higher than the national average.
As inflation eases and the job market in Orlando remains competitive, the purchasing power of the local population is on the upswing, driving the demand for retail space.
Orlando, FL, Market Performance
The overall retail vacancy in Orlando is close to its lowest level in the past decade, standing at 3.2%. It is anticipated to stay within the low 3% range in the upcoming months. Orlando’s robust economic foundation has contributed to a rapid increase in retail rents over the past year. Asking retail rents have surged by 8.1% in the last 12 months, which is more than twice the 3.2% increase observed in the National Index during the same period. The current average asking rent in Orlando stands at $29.19 per square foot, with strip centers and neighborhood centers experiencing the fastest pace of rent growth through Q3 2023. Recent construction starts have been limited, and as Orlando grapples with a shortage of accessible retail space, the vacancy situation is expected to become even more constrained.
The sales volume for the past 12 months amounts to $872 million, which is roughly 12% below the 10- year average. Q1 2024 is expected to witness more than $600 million in maturing CMBS loans. The total number of loans maturing in 2024 will surpass those maturing collectively between 2025 and 2028.
By The Numbers | Last 12 Months | Source: CoStar Group
- Vacancy Rate: 3.2%
- Rent Growth: 8.1%
- Deliveries SF: 1.9M
- Net Absorption SF: 2.6M
- Sales Volume: $872M
Daytona Beach, FL, Market Overview
Daytona Beach, located on the east coast of Florida, is renowned for its beautiful beaches, rich racing history, and diverse recreational opportunities. The robust demand for retail space in Daytona Beach is propelled by a thriving population growth and a vibrant tourism sector. Over the last year, retail demand has remained strong, reaching 300,000 square feet and surpassing all tenant demand observed in 2022 by a significant margin.
Approximately 600,000 square feet of leasing activity has occurred in the last year, including several notable deals exceeding 10,000 square feet that were finalized during that period.
Daytona Beach, FL, Market Performance
The retail sector in Daytona Beach continues to experience a tight vacancy at 3.5%, approaching a historically low level and providing limited opportunities for retailers to expand. The average asking retail rent in Daytona Beach stands at $19.00 per square foot, which is notably lower than the national average of $25.00 per square foot. Despite near-record-low vacancies and a scarcity of opportunities for anchor box spaces, there is minimal upcoming retail supply in Daytona Beach. Following a year that saw the delivery of only 12,000 square feet of new space, the current construction pipeline remains limited, with only 130,000 square feet of new retail space underway.
The sales volume in Daytona Beach over the past 12 months reached a total of $190 million. The average pricing is increasing, currently standing at $176 per
square foot, reflecting a year-over-year growth of approximately 5%.
By The Numbers | Last 12 Months | Source: CoStar Group
- Vacancy Rate: 3.5%
- Rent Growth: 5.1%
- Deliveries SF: 29.3K
- Net Absorption SF: 297K
- Sales Volume: $190M
Melbourne, FL, Market Overview
Over the last five years, Melbourne has emerged as one of the nation’s swiftly expanding economies. The region’s revitalization is attributed to the remarkable growth of the privatized space sector. There is additional retail support coming from thriving tourism in coastal communities such as Cocoa Beach and the Kennedy Space Center. This overall growth is contributing to increased demand in the housing market, subsequently generating additional demand in the retail sector.
Melbourne, FL, Market Performance
The beginning of 2023 witnessed a challenging scenario for retail demand, marked by three consecutive quarters of negative demand. With a
vacancy rate of 4.5%, tenants looking to expand face limited opportunities to identify new potential locations in this expanding market. Additionally, the availability of space becomes even scarcer as the quality of space increases. The strongest pace of rent growth is observed in the rapidly expanding Viera area, characterized by tight vacancies and asking rents for available spaces that are reaching the mid-$30 range, particularly for properties situated along primary corridors.
Retail investment activity has been strong in Melbourne over the last several years. The 12-month sales volume stands at $233 million, with average price per square foot being $26.
By The Numbers | Last 12 Months | Source: CoStar Group
- Vacancy Rate: 4.5%
- Rent Growth: 4.5%
- Deliveries SF: 111K
- Net Absorption SF: -151K
- Sales Volume: $233M
