I’ve chosen to write about Orlando, Fla., for the next post in our Market Profile series. Kimco started investing in the Orlando-Kissimmee-Sanford MSA in 1968, and now owns over 2 million square feet of leasable space across 17 retail properties in the area, including our most recent Orlando acquisition, Grand Oaks Village.
There are a number of factors that make Orlando a strong retail market. Population jumps to the top of the list. The Orlando-Kissimmee-Sanford area is well-populated, with an estimated 2,184,768 people, according to data obtained through SitesUSA. This makes it the 26th largest MSA in the United States, and the third largest MSA in Florida. Well-populated areas naturally create high foot traffic for retail.
| Orlando | |
| Population: | 2,184,768 |
| Median Household Income: | $56,512 |
| Households: | 825,058 |
| Median Home Value: | $122,442 |
| U.S. | |
| Population: | 311,873,842 |
| Median Household Income: | $53,657 |
| Households: | 118,275,661 |
| Median Home Value: | $119,582 |
Source: Data obtained through SitesUSA
Orlando’s population is also growing steadily, topping national averages. The Orlando MSA’s population grew 29.8 percent between 2000 and 2010, outpacing the United States’ growth of 9.7 percent during this same decade. This of course indicates a relatively strong area of economic growth and vitality within the country. Data obtained through SitesUSA projects Orlando’s population will grow 1.8 percent annually between 2011 and 2016, surpassing the United States’ projected growth rate of 0.8 percent.
Contrast this with the Detroit MSA, which we’ve removed from our list of top MSAs, despite its ranking as the nation’s 12th largest. Detroit experienced a population contraction of 25 percent between 2000 and 2010.
Orlando is also a hub for several major industries. A primary one is tourism. Over 50 million people visit Orlando every year, with attractions including Walt Disney World (the most visited amusement park on the planet), Universal Studios, and SeaWorld. Orlando is also a popular convention and meeting location. Together, this boosts retail expenditures as visitors eat, shop, and sightsee during their stay.
Orlando also has an established technology sector, with organizations including Central Florida Research Park, Lockheed Martin, Boeing, Kennedy Space Center, and many others located in the area. Orlando’s two non-profit hospital systems, Orlando Health and Florida Hospital, have made the area’s health care industry vibrant.
These industries are major employers for the area. Walt Disney World is the largest single-site employer in not only the area, but the country, with 62,200 employees. Several major retailers are also top employers in Orlando, including Walmart and Publix. In total, there are 84,489 businesses in the Orlando MSA and 1,049,695 employees, according to estimates from data obtained through SitesUSA.
Total household expenditure in Orlando in 2011 is estimated at $45 billion, or $54,541 per household, according to data obtained through SitesUSA. The organization also estimates Orlando’s median household income at $56,512, above the national median of $53,657 per household.
Orlando’s retail market conditions have improved over the past year. The Orlando market’s vacancy rate dropped to 7.2 percent in the fourth quarter of 2011, having dropped from 7.6 percent over the four quarters of 2011, according to The CoStar Retail Report for year-end 2011. The report also stated net absorption was moderate in the last quarter, at 396,568 square feet. The fourth quarter ended with rents at $15.33 per square foot.
Several big-box retailers have chosen to expand into the Orlando MSA in recent months and years — including Walmart, Super Target, IKEA, and Publix — showing confidence in the area’s market.
Orlando is also home to several major shopping malls, which draw significant retail traffic to the area. The Florida Mall is the area’s largest mall and one of the U.S.’s largest single-story malls, with 250 stores spread out over 1,849,000 square feet. The Mall at Millenia stands at 1,118,000 square feet, and is anchored by Bloomingdale’s, Macy’s, and Neiman Marcus.
Adjacent to the Mall at Millenia is Millennia Plaza, a Kimco property anchored by Dollar Tree, Golfsmith Golf Center, Marshalls, Off Broadway Shoes, Petco, and Pier 1 Imports. Earlier this year, Kimco acquired Grand Oaks Village, an 86,000-square-foot center located in an exclusive community with strong demographics. Average household income within one mile of the site is over $113,000, and within three miles, $97,855.
The full list of Orlando properties in Kimco’s portfolio includes:
- Sand Lake Plaza in Orlando
- Sun Plaza in Orlando
- Sodo Shopping Center in Orlando
- Tri-Cities Shopping Plaza in Mount Dora
- Seminole Centre in Sanford
- Pearl Arts Shopping Center in Altamonte Springs
- Errol Plaza in Apopka
- Renaissance Centre in Altamonte Springs
- East Orlando Shopping Center in East Orlando
- Riverside Landings in Oviedo
- Grand Oaks Village in Orlando
- Millennia Plaza in Orlando
- Bayhill Plaza in Orlando
- Vine Street Square in Kissimmee
- Leesburg Shops in Leesburg
- Century Plaza in Orlando
- Butler Plaza in Casselberry
We believe Orlando is a strong market, and is continuing to grow at a pace faster than most areas in the United States. Orlando is steadily expanding its vibrant retail sector, and is building off its established strengths in tourism, technology, and health care. Together these findings indicate Orlando is a solid area for acquiring retail real estate that will generate excellent returns over time.