Orlando’s Multifamily Rents Gain Ground Despite Elevated Deliveries

Renter demand for Orlando apartments remained healthy through the second quarter of 2025. Net absorption totaled roughly 5,000 units in the first half, above the market’s long-term average, but still down about 30% from the same period in 2024. Vacancy trends have been mixed in recent periods, reflecting high volumes of both supply and demand growth. During the second quarter, area vacancies rose to 8.4%, offsetting some of the rate improvement posted in the first three months of the year. Current vacancies are also higher than levels from one year ago, although leasing activity has kept pace reasonably well with new construction. Notably, submarkets with the greatest totals of new units, especially International Drive/Southwest Orlando, recorded occupancy gains in the first half, indicating strong renter demand for new projects in these areas. This activity has helped stabilize rents. After some softness in the middle part of 2024, rents have now posted three consecutive quarters of growth. On the supply side, multifamily development remains elevated by historical standards, though signs of a slowdown are emerging.

Orlando’s multifamily investment market has stabilized so far this year despite supply pressures, supported by continued job growth and an influx of new residents. Investors remain cautious but are noting that operational performance is on firmer footing than late last year.  The median sale price is trending lower at $221,700 per unit in deals that have closed through the first half of the year. Cap rates have generally held between 5.0% and 5.5% on stabilized Class A multifamily assets. Year to date, about 60% of sales have occurred in the International Drive submarket, compared to last year when most sales were concentrated in the North Orlando submarket on higher-end properties.

Looking ahead

Orlando’s multifamily fundamentals are expected to stay solid through 2025 and 2026 despite elevated new supply. About 12,000 units are set to deliver this year, marking the third straight year of heightened deliveries, but demand is projected to keep pace, preventing major oversupply. Vacancy should settle in the mid-8% range, with no abrupt spikes expected due to strong absorption and slower new starts. As new construction tapers in 2026, vacancy may begin to tighten again. Asking rents are forecast to rise, with 2025 rent growth likely outpacing the tepid gains of 2023-2024. Rents should advance by about 2.0% this year and could post more rapid gains in 2026 if renter demand remains strong and vacancies tighten.

Investment sales volume is expected to remain below peak levels this year, but transactions are still getting done. The International Drive corridor remains an active location for sales, a trend that is expected to continue as properties stabilize. Trades may also pick up in North and Northwest Orlando as investors target submarkets where vacancies are lower. Transaction velocity should remain consistent in the near term. More deals involving 1980s-built or value-add properties could emerge, as this vintage held up well in the last cycle, encouraging some owners to sell. Increased trading of older assets could put mild upward pressure on cap rates, though they should remain within a tight range. Declining interest rates could potentially support investor confidence and bring more buyers off the sidelines, potentially boosting sales by early 2026.

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