Posted on: July 26, 2017
Central Florida’s commercial office real estate sector is poised to repeat last year’s stellar performance this year, according to Marcus & Millichap’s 2017 U.S. Office Investment Forecast. We share Marcus & Millichap’s optimism, and believe that the Sunshine State’s commercial real estate will continue to be a smart opportunity for informed investors.
The Office Investment Forecast is based on the National Office Property Index (NOPI), a year-long projection of the office commercial markets that highlights regional and national trends. The report ranks the 46 largest markets in the US according to expected employment rates, vacancy, construction, rent increases, and national market trends.
Marcus & Millichap expect investment opportunities across Florida will improve, with Orlando poised to continue to outperform national averages. Employment in Orlando continues to improve and commercial vacancy rates are dropping, reflecting upward trends across central Florida. Contractors are adding more square footage across the region, particularly in Class B properties (those that are located outside downtown cores) such as medical offices and suburban commercial properties. These suburban and medical facilities are gathering investor attention with 7% yields.
We’ve collected key learnings from Marcus & Millichap’s Office Investment Forecast below, and we encourage you to read their full report.
- Orlando commercial rents are trending upward. Orlando rents will increase by 2.4% to $21.01 per-square-foot, with vacancy rates falling in both the commercial and residential markets.
- Orlando medical office spaces to expand. This increase reflects a US-wide upward trend of Class B commercial properties, and broader health care industry changes.
- More office jobs in Orlando and across the US. Office employment will grow in Orlando by 2%, reflecting falling unemployment across Florida. Nationally, there will be around 690,000 new office jobs added to the labour market.
- Commercial property grows with job market. Developers poised to complete 390,000 square-feet of commercial office space in 2017, expanding investment prospects.
- Trump’s economic and infrastructure plan to make investing easier. President Trump’s planned infrastructure spending coupled with looser financial regulations signal further domestic growth.
As we’ve previously reported, Florida’s commercial investment markets impressed GoBankingRates.com as well, ranking Orlando and Tampa as the best US cities to own investment property. Now is the right time, by every metric, to take advantage of commercial investment opportunities in central Florida.
MSR Holdings Inc. acquires exclusive commercial real estate investment opportunities in the US and Canada, currently focusing in Central Florida. Contact us today to discuss becoming one of our select investors.
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