The developer behind the residential mixed-use Society Orlando project that was pitched as the largest multifamily project ever proposed in the city of Orlando is scaling down its development plans by more than 40%.
Property Markets Group wants to eliminate the 28-story middle tower of the approved tri-tower building at 434 N. Orange Ave. and increase the height of the south tower from 21 stories to 28. The height of the north tower, which was part of a negotiated settlement with the city and neighboring property owner, would remain 17 stories.
Company officials declined to speak with GrowthSpotter but issued the following statement:
“PMG determined that two towers is a better for residents, the neighborhood and the real estate, because it delivers a larger initial amenity package with more efficient construction."
PMG has applied to City of Orlando for a major certificate of appearance approval for the modification, which would result in a net loss of 182 dwelling units. The third tower was slated to be the final phase of development for the project, which was originally scheduled to break ground in March. The project stalled during the coronavirus pandemic while the developers reassessed the scale and market demand for 889 residential units.
The redesign also reduces the size and height of the parking podium from 8 stories to 5 stories. The project was slated to have 120,000 square feet of office and commercial space, which included a food hall and co-working space. The new plan eliminates the 35,000 square feet of planned office space and 52,000 square feet of commercial space, leaving the project with about 33,000 square feet total.
PMG is also proposing a reduction of 647 parking spaces, according to the documents submitted to the city’s Appearance Review Board. The new construction budget is estimated at $85 million and has a tentative completion date of Summer 2023.
The phasing plan calls for construction of the south tower beginning in spring 2021, along with the amenities and bulk of the commercial space. The tower would account for 484 apartments. Phase 2 would include north tower, along with an expansion of the parking structure and 4,852 square feet of additional commercial space.
New York-based Raven Capital Management, which specializes in financing new multifamily housing in the co-living space, is still actively involved in the project.
PMG launched the Society brand in 2018 with its first projects in Chicago and Miami, which are designed to offer creative housing options with rents within reach for residents in emerging urban cores.
Luke Wickham, multifamily specialist with Institutional Property Advisors, said PMG’s decision is disappointing but not surprising, in light of current economic conditions.
“It’s definitely COVID related,” Wickham surmised. “Almost every Central Business District in the America has really struggled the last six months. The reason people want to live in the city because they like to walk to Orlando Magic games and concerts and bars.”
Those types of downtown amenities have been closed during the pandemic. Many downtown offices, particularly in high-rises, are also struggling as businesses shift to a work-from-home model. “There’s just a lot of uncertainty with COVID,” Wickham said. “I’m hoping that the project breaks ground, because it’s cool and it will be fun for downtown.”
PMG has four other Society-branded projects in the pipeline in South Florida and Arizona, totaling over 7,500 units, that were scheduled to open in the next five years.
While PMG’s project was pause, a competing multifamily project one block away is racing to completion. Atlanta-based Mid-America Apartment Communities (MAA) and design-build firm Finfrock topped out their 336-unit residential tower at 336 N. Orange Ave. in September, just six months after starting construction.
Banner Real Estate Group’s 389-unit Radius Apartments in Lake Eola Heights is scheduled to deliver its first units in spring 2021. And in Creative Village, Ustler Development and The Allen Morris Company recently opened The Julian, a 14-story mixed-use residential tower with 409 market-rate apartments.