July 9, 2025

Multifamily Rents Climb and Vacancy Tightens in Orlando Despite Continued New Construction

Q1 2025

Supply-side pressures in the Orlando multifamily market were surpassed by strong demand during the first quarter. Apartments recorded net move-ins for more than 3,300 units during the first three months of the year, up 48% from the quarterly average of the past five years. Following a spike in vacancy at the end of 2024, strong absorption led to an improvement of 60 basis points during the first quarter. Even as the vacancy rate remains elevated, it has been resilient against peak levels of supply growth over the past two years. Vacancy is currently 8%, and aside from the brief increase during the fourth quarter, vacancy has remained within this range since the end of 2023. This has fueled increases in rents, helping the market to recover from rent declines recorded in late 2023 and early 2024. Development continues to remain elevated in Orlando, with nearly 3,400 units completed during the first quarter.

The Orlando multifamily investment market has demonstrated stability so far this year, with most metrics going nearly unchanged. Transaction volume during the first quarter was nearly identical to sales recorded during the same period in 2023 and 2024, while cap rates have also remained similar to those recorded since the beginning of 2023. Pricing has trended higher in recent months, with every sale so far this year involving Class A properties. The median price thus far in 2025 is $251,400 per unit, up 5% from last year, but closely tracking top-tier pricing from 2024. Class A property sales were also elevated in 2024, accounting for more than 70% of all transactions. Around two-thirds of all properties sold this year have been built since 2020, with 2000’s and 2010’s vintage properties making up the remainder. Transactions to this point in 2025 are almost entirely within the I Drive area, though there were outliers in East Orlando and Northwest Orlando. The I Drive submarket has traditionally been a strong point for transactions in Orlando, besides a brief dip in 2023 and 2024.

Looking ahead

Despite another year of strong deliveries, operating conditions Orlando’s multifamily market are expected to remain healthy, with continued rent growth and stable vacancy ahead. Projects totaling 12,100 units are on track to come online this year, building upon the roughly 12,600 units that were delivered in each of the past two years. While supply-side pressures persist, continued absorption should keep vacancy increases mild through the end of the year. While vacancy is projected to trend higher, the rate should still close 2025 below levels recorded last year, as an abrupt spike like the one recorded at the end of 2024 is unlikely to occur in the coming quarters. Asking rents should continue to trend higher at a slightly faster pace than in 2024, though they likely won’t surpass the 2022 peak until next year. The southern submarkets of the greater Orlando will be the most impacted by new construction, as they contain the greatest share of new development. Northwestern submarkets are expected to maintain their positions as the best performing areas within the region.

The multifamily investment market in Orlando is forecast to continue current trends throughout the rest of 2025. The I Drive Orlando area will likely continue to lead the market in sales, though there should be an uptick in trades happening throughout the region, especially in northern Orlando. Future activity in these areas will be primarily driven primarily by exceptional recent rent and vacancy performance, as well as the bulk of newly built properties coming to market. While properties completed since 2020 should continue to lead in trade volume, 1980s vintage assets may see an uptick in sales as this is the only vintage that consistently sold for higher pricing each year from 2019 to 2024. If older properties begin to make up a greater share of investment activity, there could be a slight uptick in cap rates, though they are unlikely to rise past 5.5% in 2025.