Country may see growth slowing, but Central Florida not participating

While economic data show signs the rest of the country is slowing, it also clearly indicates that Greater Orlando continues to thrive. Local developers agree with the assessment, but also feel they have to plan and build smarter to keep the area robust.

That was a key takeaway from the University of Central Florida College of Business Administration conference Wednesday on the future of local real estate, where economic experts, developers and financiers discussed the area's strong health and ways to keep it that way.

"The southeast produces most of the country's gross domestic product, who leads it is Florida," said Kiernan Conway, senior valuation officer for SunTrust Banks. "And Central Florida is playing an integral role."

The comments were counter to national data given at the conference, which showed slowing in key employment, manufacturing and other economic growth data.

Reasons given for Central Florida continuing to thrive include more people recognizing the quality of life that Florida and the central part of the state offer, how the area has become better known for its medical and technological offerings, the growing tourism draw, and Baby Boomers reaching retirement age and wanting to move here.

This sets up more demand for everything from offices to industrial parks to homes.

Central Florida "is still in the growth space for real estate," said Glenn Mueller, a professor at the Denver University F.L. Burns School of Real Estate & Construction Management. "I would say we have at least another four years to go."

While developers agreed that times are good, they said business is not just falling into their laps; they have to think hard about the kind of projects they are doing and proposing.

"There is definitely a flight to quality," said Scott Fish, principal of UP Development, which specializes in retail and supermarket projects, and has redeveloped Downtown Orlando's Fashion Square Mall.

Consumers "are more sophisticated," he added. They want experiences in addition to just doing their shopping, for instance.

That's where stores like Whole Foods come in, and the developer has to know they are not building just another supermarket.

On the warehouse side, up to 40 percent of industrial buildings now have e-commerce-related tenants leasing space, which forces "innovation," said Steven McCraney, CEO of McCraney Property Co.

Shifts are also occurring when it comes to residential choices. Some developers contend that something else is starting to hold sway over single family homes: apartments.

"Homeownership is no longer something that is desired," said Trip Stephens, chief investment officer of ZOM Holding.

Aging Baby Boomers and Millennials want apartments, he said.

Millennials are also playing a big role in the way offices are built, said Scott Stahley, senior vice president at Lincoln Property Co.

"The bar is a lot higher than it ever was from a standpoint of what a tenant wants," Stahley said. "You have to have a sales pitch."

Layouts that are desired include open floor plans and collaborative space, he continued.

"Everything is on an upswing in Orlando, but it is a tough sell for us," Stahley said.

Have a tip about Central Florida development? Contact me at ktalley@growthspotter.com, via Twitter at @karentalley or (407) 420-5176. Follow GrowthSpotter on Facebook, Twitter and LinkedIn.