BBX pursues new multifamily option for segment of Gardens on Millenia

BBX Capital Real Estate is pursuing a new multifamily option for what may be the last developable segment of its 87-acre Gardens on Millenia project, east of the Mall at Millenia.

The Fort Lauderdale-based developer says roughly 9.5 partially submerged acres remain with development potential on the northwest corner of Lake Amanda, fronting Interstate 4 and directly north of Home Depot. 

BBX has asked the City of Orlando to amend its Framework Master Plan for Gardens on Millenia from 2013, and change the development program for that 9.5-acre segment from commercial/retail to multifamily, for up to 350 apartments in the future. It should go before the Municipal Planning Board in mid-September. 

"We finished up all the master development there a while back, and recently decided with that final parcel to start modifying the entitlements now for multifamily units in lieu of commercial," Managing Director Bruce Parker told GrowthSpotter. "There is no deal in place, no developer or builder chosen. But it's allowed within the zoning we have there. 

"The Orlando multifamily market continues to be strong, no question, so we think there's definitely still a need for more development of that type of housing," he added.

BBX and South Florida-based Stiles Corporation co-developed the 300,000 square feet of retail space at Gardens on Millenia through 2016 and 2017, after selling an adjacent 15.46 acres in 2015 to Costco where it built a 152,000-square-foot wholesale store and fuel station. 

BBX also entered into a joint venture with ContraVest to develop 11.5 acres of the project as the 292-unit Addison on Millenia apartments. That partnership owns the land, built and manages the apartments, with ContraVest as managing member and the property now leased near full occupancy. 

BBX sold fully leased segments of the retail center in December 2017 and this past April for a combined $29.4 million to two different Texas-based investment groups. 

Filling part of Lake Amanda to accommodate development won't be a new challenge for BBX. The lake was originally a borrow pit dug in the 1960s to build I-4. 

A few years ago it was 50 acres in size, but BBX reclaimed about 15 acres of that for upland to develop the Costco site and one third of the ContraVest apartments site. That involved pumping down the lake's water level and bringing in fill dirt to compact up to 30 feet, Parker said. 

"It would be a very similar project for this next phase," he added. "We would drain a portion, possibly by building a cofferdam, then we can create the upland that is restricted to the area in our plan." 

Estimated new job growth for the Orlando metro in 2018 equates to demand for 7,500 new apartment units in the market this year, or one new apartment for every six new jobs expected, per Charles Wayne Consulting.

Metro Orlando was the fastest growing region in the United States for population gain between 2015 and 2016, according to data from the U.S. Census Bureau and Orlando Economic Development Commission. 

The economy is driving that population growth, with 2015-16 job growth in Orlando topping out at twice the national average, per the Bureau of Labor Statistics' employment data. Local job growth is expected to run 2.1 percent annually through 2022 compared to 0.8 percent nationally, according to an Orlando Summer 2018 market report by Fannie Mae

The region's job growth rate has consistently outpaced its population growth rate, forecasting a need for more workers to move to the region.

New apartment development, shadow rental market supply and job growth concentrated in lower paying fields are all restraining what could otherwise be a broadly booming Orlando apartment market, per Fannie Mae. 

The region's longer term growth prospects should create solid demand for apartment rentals over the forecast horizon. While volatility with prospective apartment developments is concerning, wrote Fannie Mae, the fundamental growth necessary for long-term rental demand in Orlando should be reliable. 

Greg Lee of BakerHostetler is legal counsel for BBX on its new city application, and Madden, Moorhead & Stokes the civil engineer. 

Have a tip about Central Florida development? Contact me at bmoser@growthspotter.com, (407) 420-5685 or @bobmoser333. Follow GrowthSpotter on Facebook, Twitter and LinkedIn.

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