Orlando’s multifamily investment market hit an inflection point in the first half of 2025.
Insurance rates and construction starts tapered, and we’ve started to see cap rate compression and signs of rent growth. Our traditional, “household name” and institutional multifamily buyers are back in the market and at the top of the bid sheet. Additionally, investors are showing a strong interest in and appetite for build-to-rent (BTR) communities as that subsector continues to gain favor.
It’s a significant improvement from where we were, coming off the post-pandemic roller coaster ride that saw record years for multifamily investment and pricing in 2021 and 2022 followed by interest rate spikes, cap-rate spikes and all coinciding with higher construction costs, skyrocketing insurance costs and a supply glut.
Of course, Orlando is one of the fastest growing metros in the United States, so new multifamily supply is certainly needed as the region grows in terms of population and affluence. Orlando’s population is expected to hit 3 million this year, with the metro area adding 1,500 new residents per week, according to the Census Bureau. What’s more, year-over-year median household income grew 3.6 percent year-over-year.
It’s no surprise that the region continues to rank among the top markets nationally for new development, with 12,262 units under construction at mid-year. Once completed, these projects will expand the multifamily inventory by 5.5 percent.
However, this also represented the lowest construction volume since the start of the current building cycle in 2020. The slowdown will prove beneficial, allowing more time for the lease-up of the more than 56,000 units that have been built since 2020 as Orlando continues to grow.
In the first half of 2025, 6,173 units were delivered, a 13 percent decline compared to the same period last year. The Southwest Orlando submarket remained a focal point for development, with 1,752 units delivered year-to-date and another 2,365 units underway. Orlando was Florida’s leading market for multifamily absorption in 2024, and the I-Drive and Southwest Orlando submarkets have recorded the steepest occupancy gains through mid-year, a positive indicator as both submarkets have the largest pipelines underway.
Investor outlook
Investor interest and activity has significantly increased since the start of the year, and we’re past some of the uncertainty and headwinds of the past two years. Family offices and discretionary funds are particularly aggressive, and core-focused, institutional investors are competitive as well. A couple of broader economic factors — as well as insurance premium declines — help tell the story.
Orlando’s tourism and hospitality offerings are world-renowned and continue to thrive, but the region is increasingly economically diverse. The Lake Nona life sciences and medical cluster has emerged as a national center for healthcare and innovation. Similarly, aerospace and defense industries are growing in Central Florida, especially with increased private investment in space exploration, while leading global financial services firms have an increasing footprint in Orlando as well.
Despite Florida being hit with several major storms last year, insurance premiums continue to decline, attracting multifamily buyers back into Florida that may have been gun-shy about investing in the state due to record high insurance cost increases of the past few years. Orlando is seeing some of the lowest insurance figures in the state in addition to being more insulated inland off the coast, which further positions the market’s appeal for multifamily investment.
So, with Orlando’s growth, an improved insurance climate and investors’ interest, especially for newer product, we’re at a precipice. We have seen over 60,000 units built in the past five years in the Orlando MSA, but only approximately 15,000 units have sold in the same time period, leaving a significant amount of new construction inventory on the table.
Furthermore, many vintage communities that sold at the height of the market in 2021 and 2022 that have been stuck due to diminished values and lofty loan balances are also starting to come to market as lenders are no longer willing to extend their loan term and require to be paid off. As market conditions improve, we expect significantly more inventory to hit the market in what could potentially be record years of transaction volume.
In addition to increased interest and investment in traditional multifamily development, we are seeing strong investor appetite for BTR communities due to their renter demand, resiliency and flexible exit strategies. BTR has typically been in suburban areas of Orlando but is still in its infancy stages, with only 5,000 units of inventory in the market, a 20 percent increase in just the past year alone.
There are only 833 BTR units currently under construction, still leaving a large gap to satisfy the renter pool and investors looking for BTR opportunities. Most of the BTR product that has traded has been in “forward-sales,” where residential developers contract with a buyer prior to development completion and then close upon certificate of occupancy, sometimes in phases. There have been few stabilized BTR properties that have yet come to market, but we do expect to see a wave of this product offered over the coming year as communities stabilize.
As we mentioned, the full gamut of multifamily investors have an increasingly favorable view of Orlando. As the region continues to grow, we’ll see new product, both traditional multifamily and BTR, steadily absorbed. As supply stabilizes and rents trend up, we expect a more aggressive investment climate through 2025 and certainly carrying over into 2026 and beyond.
— By Mike Donaldson (Vice Chairman), Nick Meoli (Vice Chairman) and Joey Blakley (Senior Director), who lead Cushman & Wakefield’s Multifamily Advisory Group in Central Florida. Additionally, Blakley leads the firm’s BTR advisory efforts in Florida. This article was originally published in the August 2025 issue of Southeast Real Estate Business.