UPDATED: JANUARY 9, 2018 5:46 PM — Illinois-based multifamily developer Banner Real Estate Grouphas a name and general contractor chosen for its planned 13-story apartment building in Downtown Orlando, and is on pace to break ground by June.
This would be Banner's entry to the Central Florida market, with a six-parcel assemblage under contract that totals about 1.77 acres at 108 E. Livingston St., on the southeast corner with N. Rosalind Avenue.
The developer earned a key initial approval in September and October from Orlando's Municipal Planning Board and City Council. It involved a series of requests that included rezoning, to prepare the site for up to 389 apartments and retail.
Banner has since finished schematic design, and is now working through value engineering and construction documents, while also trying to negotiate impact fees with the city, Director of Development Tom Suminski told GrowthSpotter.
The company's goal is a second quarter groundbreaking on the site, with a 19- to 20-month construction timeline, Suminski said. Closing on the land purchase is now projected for the end of March through mid-April.
Banner also now has "Radius" as a working title for the apartments project, inspired by the location as a nexus point in Downtown Orlando.
"We liked 'Radius' because this site is in the middle of a bunch of different neighborhoods that we think our (building) can link together," Suminski said. "This site's cross streets connect it all, and if you live here you can get everywhere (downtown) easily."
The latest total project cost estimate is near $89 million, Suminski said. Up to 65 percent of that may be financed, so Banner is talking now with a family office that has funded some of its past projects and would turn to debt providers after, he added.
A commercial real estate brokerage firm has not been chosen yet to market the building's 14,000 square feet of ground-floor retail space for lease. Banner has met with a few, said Suminski, but considers now still early in the project's timeline for that selection.
The Livingston-Rosalind intersection is one of the busiest in Downtown Orlando, and because of the curve of Rosalind Avenue, the extensive street frontage of that side of the building will be highly visible from multiple vantage points.
Along Rosalind Avenue the building's base frontage would feature retail and creative landscaping in a curvilinear public plaza, currently designed with a water feature, built-in seating and a trellis that invites visitors to congregate.
Banner believes the plaza entry point on Rosalind will benefit from increased foot traffic toward Lake Eola in the future, as Creative Village is populated and more office and multifamily development occurs north of the property.
The Downtown Orlando submarket is supporting the highest rent averages in Greater Orlando at roughly $1,700 per month (close to $2 per square foot) for properties built since 2013, according to Luke Wickham, senior vice president and multifamily specialist with CBRE.
"The market is extremely strong. We have occupancy rates at 95.3 percent in downtown, and that's with the 420 East apartments just finished leasing up, where they're getting more than $1,900 per month on average," he said.
"Anything above 90 percent is stabilized, so a full 5 percent above that means it is as tight as it's ever been in Orlando. Rents year over year were up 5.7 percent in Orlando overall, and in downtown rose more than that."
New Class-A multifamily investment in downtown is supported by the relatively high wage earners from Orlando Health's and Florida Hospital's campuses that anchor the submarket. Investors like Banner are betting now on further economic growth coming in two years from Creative Village, Wickham said.