Even though he has approval from the city of Orlando to build a 12-story mixed-use tower overlooking Lake Eola, James Dicks is not in any kind of hurry.
Asked by GrowthSpotter recently how his Vive on Eola project is coming along, the local developer summed it up with a single word.
“Slowly,” said the CEO of Lake Mary-based Dix Developments.
Vive on Eola promises to deliver 3,800 square feet of ground-level retail uses, 13,750 square feet of office/co-working space, and 7 stories of residential micro apartments totaling 126 units to Thornton Park at the corner of Church Street and South Eola Drive. And while it’s still moving forward, Dicks said industry challenges, such as high construction costs, the shortage of building materials and labor, and rising interest rates, have slowed the progress to a crawl.
There’s just too much uncertainty in the marketplace right now to begin vertical construction, Dicks said.
“I don’t think there is any uncertainty as far as how exciting Orlando, specifically the downtown area, still is, but there’s a lot of uncertainty on the national level as far as interest rates rising,” he added.
In early February, Federal Reserve officials made their eighth interest rate increase in a year and signaled perhaps two more to come as they continue their fight against rapid price gains. While the rate now ranges from 4.5 to 4.75%, bankers have projected that the rate would rise above 5% in 2023, the New York Times reported.
Interest rates impact everything from buying a home or a car to taking out loans for construction projects.
“We are not going to do anything for the next six months for sure,” Dicks said of his Lake Eola project. “I don’t want to start something and then things get worse.”
But it’s not just interest rates developers like Dicks have to contend with. Construction materials and labor are getting more expensive and harder to come by.
In a real estate market report published in December, CBRE estimated a construction cost growth of 5.4% in 2023.
“Higher interest rates and slow economic growth could cause delays to many constructions projects,” the CBRE report reads.
GrowthSpotter checked in on the status of other tall projects planned for Orlando. Here’s an update on where things stand:
Crane’s Roost 18-story apartment
Rhode Island-based Gilbane, Inc., one of the oldest and largest family-owned development firms in the world, was on the cusp of getting final approval from the city of Altamonte Springs for an 18-story apartment tower with multiple rooftop decks.
But before getting that last permit, the developer decided to pump the brakes.
“We have hit the pause button,” Bob Gilbane, the company’s vice president, told GrowthSpotter.
It’s due to “inflationary pressures for materials and labor,” he added.
“Market material costs have increased substantially over the past year,” Gilbane said. “We remain hopeful that inflationary pressure will ease over the next twelve months to allow us to proceed.”
The highrise 346-unit multifamily project is slated for a vacant parcel fronting Cranes Roost Park, directly east of the Embassy Suites by Hilton Orlando North hotel.
The apartments would be situated in one multilevel building towering as high as 80 feet. The low-rise eastern portion of the structure will be kept to five floors with a rooftop deck featuring a resort-style swimming pool and firepit area, conceptual plans show.
An 18th-floor sky terrace is proposed on the taller portion of the building and features a fitness center, yoga room, media room and clubroom/lounge area. The ground floor of the apartment building consists of leasing offices, a package room, a game room, conference rooms and a 1,170-square-foot coworking cafe.
The parking garage will feature spaces for public parking as well as parking for the neighboring hotel.
Altamonte Springs City Manager Frank Martz calls it “an exciting, extraordinarily high-quality” project.
“The city owned that property many years ago and assembled it and got it entitled,” he said. “It is one of the last pieces of vacant land that could host a significant amount of investment per square foot. It will develop, it’s just a matter of waiting for things to get better.”
Creative Village’s 26-story apartment tower
Ustler Development and The Allen Morris Company unveiled plans in July 2021 for new construction in downtown Orlando’s Creative Village.
“This is the biggest project in Creative Village so far, and one of the biggest in the history of downtown Orlando,” Craig Ustler, the company’s president, said at the time.
The project was originally expected to carry a price tag of $250 million, but that expected cost has since risen, Ustler said.
A 10-story hotel overlooking Luminary Park with 180 rooms and 5,000 square feet of meeting space is among the plans.
The tallest part of the project though involves the construction of a new 26-story luxury residential tower on Parcel Y. The initial specs call for 324 residential units, totaling 259,000 square feet, plus 4,000 square feet of ground-floor retail.
The $150 million tower would have unobstructed views across I-4 of downtown Orlando’s Central Business District. The project will have a full suite of amenities, including an elevated pool over the parking garage on level 8. Residents also would have direct access to the rest of Creative Village through Bob Carr Plaza and a breezeway that runs between the hotel and office buildings.
How’s the project coming along?
“We are not on pause and we are pushing forward but factors —higher interest rates, high construction prices and the general overall uncertainty in the capital markets — are causing things to move slower than anticipated,” Ustler said recently. “These circumstances are affecting all real estate development projects, including ours.”
He said he doesn’t know when construction will start.
“We are well into the predevelopment process and are at 100% complete construction drawings with an approved building permit,” he said. “So it is just a matter of navigating the uncertain capital markets to get over the finish line and get started. "
Downtown Orlando’s 33-story Marriott-branded hotel/condo
In September, the city of Orlando’s Appearance Review Board awarded a major certificate of approval to a 33-story mixed-use tower with hotels and condos that will carry the Marriott Flag.
Developers Albert Socol and Marlene Weiss, the husband-wife heads of Summa Development Group, are leading the project.
“We are working on the financing,” Socol said, adding that the project is still moving forward as planned. He could not provide an estimated start date for construction.
Plans for the J.W. Marriott Hotel/Convention Center & Residences include a hotel portion with 218 guest rooms, 13 suites, a dozen meeting rooms and large and small ballrooms across 155,628 square feet.
The project also calls for 113 luxury residences that will share the JW Marriott branding. The lobby will have a concierge station, conference room, three elevators to serve the 16 residential floors and a private entrance to the hotel bar/restaurant. The condo owners will have their own swimming pool separate from the hotel, as well as a private gym, library/card room, massage studio, cafe and sunset lounge on the 19th floor.
The developers are building a rooftop garden on the ninth floor for weddings.
Lake Nona’s 18-story Skylar Towers
After getting the OK from a city of Orlando planning board in June, Tavistock Development Company is moving ahead on what would be its largest, and tallest, apartment community in Lake Nona to date.
Skylar Towers would consist of 627 residential units spread across three mixed-use residential towers and eight 2-story townhouses. The largest tower would stretch 18 stories.
In June, Tavistock Vice President Jessi Blakley told GrowthSpotter the developer is targeting early 2023 to begin construction with an estimated two-year buildout.
A Tavistock spokeswoman said this week that there are no new updates to provide regarding the project.
In addition to apartment units, the mixed-use project also calls for 25,473 square feet of office and retail space.
Tower A, located in the northeast corner of the site, is 18 stories with 221 residential units (including the only three-bedroom units), with 7308 square feet of retail on the ground floor attached to an amenity room that opens up to the shared outdoor swimming pool and courtyard.
Tower C would be a 16-story building attached to the parking garage, which accommodates 811 vehicles and has 25 private garages that offer direct access to the elevator cores. This tower, which is just east of Landon House, has over 10,000 square feet of retail on the ground floor and hosts the leasing office. It would have 168 units, including a mix of studios, one- and two-bedroom units.
There’s also a separate 2-story amenity building on the south end of the courtyard with nearly 14,000 square feet. It will include a lounge space and fitness center.
Ponte Health’s 35-story Medical Tower
Orlando’s municipal planning board gave Ponte Health approval in late February to build a 35-story mixed-use project called Medical Towers.
Slated for a 2.5-acre parcel at 1000 N. Orange Avenue, the project calls for 878 units of assisted living, 94,224 square feet of office and urban farming space, 378,783 square feet of medical office, 98,146 square feet of ancillary uses, and a parking garage with 810 spaces
The proposed $1.1 billion project would anchor Orlando’s North Quarter district halfway between the CBD and Medical City.
Orlando’s City Council, in 2019, approved the master plan for the proposed 444-foot tower, as well as the Conditional Use Permit that allows the assisted living to be built in an Urban Activity Center. At the time, city officials called the project a “pioneering concept for the city” and lauded its world-class architecture. The 2019 permit expired last year, which required Ponte to resubmit the plans for approval.
Ponte Health CEO Tabitha Ponte could not be reached for comment.
Editor’s note: An earlier version of this story incorrectly stated that the 26-story apartment planned by Ustler Development for Creative Village would be called Stage House. Stage House is a separate project that is only conceptual at this point. The apartment would go on parcel Y, not parcel X-1.
Have a tip about Central Florida development? Contact me at (407)-800-1161 or dwyatt@GrowthSpotter.com, or tweet me at @DustinWyattGS. Follow GrowthSpotter on Facebook, Twitter and LinkedIn.