Demand from millennials, baby boomers and an ever-growing tourism labor force is driving new apartment development in the International Drive corridor. Nearly as many new projects have been prepped in the sub-market for construction over the past two years as the number opened there since 2010, and developers tell GrowthSpotter demand should draw more construction in the near future if rising land values allow.
Eight new apartment developments have been opened since 2010 in the two zip codes that encompass the I-Drive corridor -- 32819 and 32821 -- bringing 2,390 new units to the area. There are now 22 apartment communities in that I-Drive corridor sub-market, with 7,101 units overall, according to the Apartment Association of Greater Orlando(AAGO) and ALN Apartment Data, Inc.
In the past two years, at least seven more new apartment projects have been permitted for construction or registered their development plans with Orange County government. Those include:
7207 Crossroads Garden Drive (Alexan Crossroads): 314 units
6801 Integra Cove Blvd. (Integra Cove Apartments): 64 units
12014 Meadow Bend Loop (Bristol Lakes Apartments): 416 units
10900 Turkey Lake Rd. (Turkey Lake Road Condominiums): 196 units
11600 block of International Dr. (Ancora Apartments): 288 units
9703 Avellino Ave. (The Courtney Apartments): 355 units
"The number of apartment complexes being built near I-Drive in recent years is incredible," said Luann Brooks, executive director of the I-Drive Improvement District. Closer analysis may be pursued in the future on how to develop the I-Drive area with more residential in mind for the 40,000-plus employees who support the sub-market, she added.
When looking at new markets or expanding markets, the first thing developers look at is job growth, said Chip Tatum, CEO of AAGO.
"Building near existing infrastructure is ideal, but obviously in Central Florida there are challenges to that, as this area's original plan was sprawling growth at any cost," he said. "Infrastructure is still secondary to the demographic numbers they need to make a project work, and I-Drive has it."
Orlando's apartment rental market's top two demographic groups for the foreseeable future are millennials and baby boomers, Tatum said. Those consumer groups are pushing the evolution of apartment amenities to include features like communal gathering space, dog parks and pet services on-site, dry cleaning services and more.
"One similarity we've noticed between the demands of millennials and those of baby boomers is the desire for community and shared spaces, whether that be a café, a pool area or a community garden," said Justin Sand, president and COO for Epoch Residential, which opened the 356-unit Sea Isle Apartments near SeaWorld in 2014.
"Those types of amenities — ones that give residents a chance to connect with each other — are frequently included in our plans."
Proximity to I-Drive's dense zone of employment and easy highway access were keys in drawing Altamonte Springs-based developer ContraVest to Universal Boulevard and Destination Parkway, where it's currently building The Courtney Apartments with 355 units.
"Home ownership in 2007 at the height of the market was at 68 percent, but has now dropped down to 63 percent, so we've lost around 5 percent of homeowners nationally and had millions go back into the rental market," said John Schaffer, principal and CFO at ContraVest. "I've heard from analysts that this figure may drop further to 61 percent, so even more will be moving to the rental market."
ContraVest is able to promote walkability for The Courtney in a way few apartment developers can along the I-Drive corridor.
Its residents have a Publix within walking distance at Lake Cay Commons Plaza, a Walgreens pharmacy directly across the street that's occupying ground-floor retail space at The District apartments (opened in 2014 with 425 units), and the expectation of retail and dining build out on undeveloped parcels bordering two sides on Universal Boulevard.
Some apartment developers in the I-Drive area are making informal use of the "Live-Work-Play" marketing tag that helped popularize Downtown Orlando in recent years. I-Drive has the entertainment and dining options well in hand, which may be enough to win over potential renters who are less concerned with the area's low Walk Score.
"For those two top growth demographics, access to leisure, dining and entertainment are just as important or more for them than walkability," said AAGO's Tatum. "They're very social demographics, and apartment communities provide that access to mix and mingle."
Dining and retail developers still won't bank solely on the foot traffic of a new apartment property when considering whether to set up shop nearby. But because they study day-time population, traffic counts and the tourist head counts for nearby hotels, the I-Drive corridor is able to meet the metrics needed by commercial developers of grocery, pharmacy and other staples that are becoming expected in mixed-use environments, said Tom Heer, commercial realty broker with LandQwest.