Why Orlando

ORLANDO Why

DYNAMIC TRENDS DRIVING GROWTH Q1 2024

Orlando Snapshot

The Orlando – Kissimmee – Sanford (MSA) in Central Florida is comprised of the following counties: Seminole

ORLANDO

About Orlando

SEMINOLE

Orange Osceola

ORANGE

OSCEOLA

#1 Best Large City to Start a Business

WalletHub, 2024

WITH OVER 2.8 Million People, the Orlando Region is the 4 th Largest MSA in the Southeast

Cushman & Wakefield | Why Orlando

Contents

MARKETBEAT Office Q2 2023 ORLANDO

14.4% Vacancy Rate -330K YTD Net Absorption,SF $26.46 Asking Rent,PSF (Overall, All PropertyClasses)

YoY

Chg

12-Mo. Forecast

ECONOMY Orlando had an unemployment rate of 2.6% in Q2 2023, 10 basis points (bps) lower than the rate one year ago and well below the national rate. Job growth held in Orlando despite the current economic slowdown, as nonagricultural employment grew by 50,300 jobs, or 3.6% year-over- year (YOY). The region had the highest annual job growth in leisure and hospitality out of Florida’s maj or markets, with 28,800 jobs added. Office-using employment gained 5,200 new jobs YOY, a 1.3% rise. DEMAND Orlando recorded 714,000 square feet (sf) of leasing activity in the second quarter, bringing the year-to-date (YTD) total to 1.2 million square feet (msf). Quarterly activity was up slightly YOY by 1.3% and up 54.8% from the previous quarter. Suburban submarkets significantly outperformed downtown with 86.3% of leasing activity in Orlando occurring outside of the urban core for Q2. This was bolstered by the Lake Mary/Heathrow submarket, which recorded Orlando’s first transaction above 150,000 sf in 13 quarters. Leasing activity in Class A assets accounted for 59.6% of the YTD total as tenants continued to target premium and amenity rich space to motivate return-to-office initiatives. SUPPLY Overall vacancy increased 120 bps YOY to 14.4%, up 20 bps from the previous quarter after remaining stable for much of 2022. The Orlando market recorded a single delivery in Q2 for the University/ Research Park submarket. The 68,700-sf building at 12700 Ingenuity Drive was occupied by Astronics Test Systems, resulting in 17,900 sf of positive absorption as the tenant relocated from a smaller space in the same submarket. The next largest occupancy of the quarter was Federal Emergency Management Agency’s (FEMA) move into a 60,000-sf Lake Mary building at 701 International Parkway. Meanwhile, Lake Mary also housed the largest new vacancy of Q2 as BNY Mellon vacated its space at 100 Colonial Center Parkway. The company is relocating in the same market, with a deal signed in June for nearly 200,000 sf at 600 Colonial Center Parkway, estimated to be fully moved in by fourth quarter. PRICING Asking rate averages rose 2.9% YOY to $26.46 per square foot (psf) full service gross (FSG). Rents in Class A assets closed out the quarter at $28.60 psf FSG overall, up 1.6% YOY. Continued leasing of premium Class A space flattened YOY growth, as higher valued asking rents came off the market. Landlords appeared to hold firm or even push asking rates upward to combat increasing operating costs.

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ECONOMIC INDICATORS Q2 2023

1.4M Orlando Employment

YoY

Chg

12-Mo. Forecast

2.6%

Orlando Unemployment Rate

3.6% Related Insights Cushman & Wakefield Research reports analyze economic and commercial real estate activity including supply, demand and pricing trends at the statewide, market and submarket levels. U.S. Unemployment Rate -1,500 -1,000 Thousands -500 0 500 1,000 2019 2020 2021 2022 2023 YTD Net Absorption, SF Construction Completions, SF $20 $21 $22 $23 $24 $25 $26 $27 2019 SPACE DEMAND /DELIVERIES Source: BLS, FL Dept. Economic OPP

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OVERALL VACANCY & ASKINGRENT

20%

16%

12%

2020

8%

2021

Asking Rent, $ PSF

4%

2022

0%

2023

Vacancy Rate

Migration Hot Spot Historic Population #2 OUT OF THE 30 LARGEST MSAS IN THE U.S. for Population Growth by Percentage from 2022-2023

Net Migration

Projected Growth

2.8M

3.2M

80k

2.85M

3.0 %

3.2M

70k

2.8M

2.5 %

3.1M

58.2k

60k

2.4 %

2.75M

2.0 %

49.6k

50k

3M

2.7M

2.9M

1.5 %

40k

2.65M

2.9M

2.6M

1.0 %

30k

2.6M

2.8M

0.5 %

20k

2.55M

2.7M

10k

2.5M

0.0 %

2024

2025

2026

2027

2028

2029

2030

2018

2019

2020

2021

2022

2023

2018

2019

2020

2021

2022

2023

Population

Growth %

Net Migration

Population

#7 IN THE NATION FOR NET MIGRATION FROM 2018 – 2023

600k

497k

400k

314k

279k

276k

273k

248k

232k

179k

166k

148k

200k

137k

135k

133k

110k

102k

100k

San Francisco, CA

Los Angeles, CA

33k

Chicago, IL

New York, NY

0

Dallas, TX

Houston, TX

Austin, TX

Tampa, FL

Phoenix, AZ

Atlanta, GA

Orlando, FL

Charlotte, NC

San Antonio, TX

Jacksonville, FL

Raleigh, NC

North Port, FL

Nashville, TN

Lakeland, FL

Las Vegas, NV

Miami, FL

Seattle, WA

−200k

−164k

−339k

−400k

−600k

−551k

−688k

−800k

Cushman & Wakefield | Why Orlando

Net Migration (2018 – 2023)

Projected Net Migration (2024 – 2027)

Industry Diversity

121k Total Businesses

63.5% White Collar

18.9% Blue Collar

17.7% Services

Business Summary BY NAICS (%) Orlando U.S.

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0.0 %

5.0 %

10.0 %

15.0 %

20.0 %

Leisure & Hospitality

#1 #2 #3 #4 #5

Professional & Business Services

Trade, Transportation, and Utilities

Education & Health Services

Government

Construction

Financial Activities

Other Services

Manufacturing

Information

Cushman & Wakefield | Why Orlando

Skilled & Growing Workforce

Unemployment Rate

Labor Force

1.5k

1.5k

8.0 %

1.45k

6.0 %

1.4k

ORLANDO IS #3 Hottest Job Market in the United States. Wall Street Journal, 2024

1.35k

1.3k

4.0 %

3.1 %

3.0 %

1.3k

2.0 %

1.25k

1.2k

IN 2023, Florida Ranked #1 For Talent Attraction

0.0 %

2018

2019

2020

2021

2022

2023

2018

2019

2020

2021

2022

2023

*Values are Annual Averages

*Values are Annual Averages. Peaked in May 2020 at 22.1%

WITH THE ORLANDO AREA COMPRISING TWO OF THE TOP 50 COUNTIES

Nearly 41% OF THE TOTAL POPULATION IS 25–54 YEARS OLD. ESRI

1.5M Employed Workers

#38 Lake County

#41 Osceola County

ESRI

Cushman & Wakefield | Why Orlando

Tourism

ORLANDO NAMED

57.7M Orlando International Airport Volume

1.5M Orlando County Convention Center

130k+

The Largest U.S. Travel & Tourism City Destination.

Hotel Rooms

#3 Best Business Travel Destination in the U.S.

2023 YEAR END

2023 YEAR END

WORLD TRAVEL & TOURISM COUNCIL

ORLANDO'S MASSIVE TOURISM PRESENCE BRINGS BUSINESS INTEREST, WITH NEW-TO-MARKET COMPANIES BOTH NATIONALLY AND INTERNATIONALLY IN THE LAST 12 MONTHS

Booking.com, 2023

THEME PARK CAPITAL OF THE WORLD WITH 7 OF THE NATION'S TOP 10 THEME PARKS BY ANNUAL ATTENDANCE

74M VISITORS IN 2022

#1

#10

#3

#7

#4

#6

#5

25% YOY GROWTH

Brightline Orlando Station now open, offering additional access from Florida's southern markets.

Cushman & Wakefield | Why Orlando

Work Life Balance

Vibrant Night Life

DOWNTOWN ORLANDO

DISNEY SPRINGS

Ranked 11th Best City in the U.S. and 52nd in the World Resonance "Best Cities"

THEME PARKS 7 MAJOR PARKS

UNIVERSAL CITYWALK

Four Professional Sports Teams

82°- 64° average annual temperature

#1 Food City in the U.S. WalletHub, 2023

Orlando Solar Bears

Orlando Pride

Orlando City SC

Orlando Magic

HOCKEY

SOCCER

SOCCER

BASKETBALL

Cushman & Wakefield | Why Orlando

Education

#2 Best College City in America for Large Cities & 3 rd Overall Nationally 2023 WalletHub Best College Town & City ranking

Top Colleges BY ENROLLMENT 2023

University of Central Florida 68,442 Valencia College 47,626 Eastern Florida State College 18,562 Seminole State College 14,813 Daytona State College 12,728 Embry-Riddle Aeronautical University 8,119 Lake-Sumter State College 5,133 Florida Institute of Technology 5,043 Full Sale University 4,353 Rollins College 3,029

25+ Educational Attainment 2023

UNIVERSITY OF CENTRAL FLORIDA 8th Most Innovative University in the Nation – U.S. News & World Report

12.6%

College of Business Named Among the Princeton Reviews List of "Best Business Schools for 2023" (list was not ranked)

23.6%

12.5%

>170k students attend one of the numerous, distinguished educational institutions in the Orlando area.

17.2%

ROLLINS COLLEGE Princeton Review recognized the Winter Park School as one of the nation's 50 "Best Valued" private colleges and universities.

21.5%

4.3%

5.1%

3.2%

Graduate/Professional Degree

High School Graduate

Bachelor's Degree

GED/Alternative Credit

35+ local colleges and higher education institutions preparing graduates with market-demand skills

Associate Degree

9th-12th Grade, No Diploma

Some College, No Degree

Less than 9th Grade

Cushman & Wakefield | Why Orlando

Logistics & Transportation

Map Layer Options

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Rail & Intermodal

Ports

Highways

Metropolitan Areas

Major Airports

Map Legend

Rail Brightline's Orlando station is now open. The high speed train offers convenient connectivity to Florida's southern markets. Orlando's SunRail is a commuter rail service with 16 stations across greater Orlando. Sky 2 International Airports - Orlando International Airport (MCO) and Orlando Sanford International Airport (SFB). MCO recorded over 57.7 million travelers throughout 2023, a 15% increase annually, with international travel up 27%. MCO's Terminal C expansion was finished in 2022, greatly improving the airport's ability to handle the surge of traffic post travel shutdown.

Sea 60 minutes to Port Canaveral.

Close access to deep water container port and cruise ship access.

Land Orlando's central location supports logistical distribution advantages to service the entire state. Florida DOT has $2.4B in I-4 express lane expansion planned over the next 10 years.

Cushman & Wakefield | Why Orlando

New-to-Market Tenant Demand

CMG Cleantech

Enklu - Verse Immersive

Boston

Rocket Technology

Chicago

Maryland

San Francisco

Paris

Standard Motor Products Inc

Denver

Irvine

The Deluxe Group

Dubai

Kaseya IT

Hudson Procurement Group

Orlando Continues to Draw a Wide Array of New-To-Market Companies Both Nationally and Internationally

ExamRoom.AI Corp

Cushman & Wakefield | Why Orlando

New Development

ORLANDO MAGIC'S Sports & Entertainment District

TOWN CENTER

Over $2 Billion IN NEW DEVELOPMENT

$70 Million INVESTMENT (PHASE 1 COMPLETED IN 2016)

$500 Million INVESTMENT (ESTIMATED START LATE 2024)

900 KSF OFFICE / CREATIVE

200 KSF CLASS A OFFICE

68 AC MIXED-USE

4 MSF COMMERCIAL RETAIL HOSPITALITY

+5 KSF MEETING & EVENT SPACE

715 KSF 5 COMPLETED OFFICE BUILDINGS 120k SF PROPOSED

260 HOTEL ROOMS 16 KSF CONFERENCE SPACE

800 KSF HIGHER EDUCATION

270 RESIDENTIAL UNITS

166 KSF ORLANDO STUDIO + 2k Game Developers PROFESSIONALS AND STUDENTS

200–Room DUAL-BRANDED COURTYARD BY MARRIOTT & RESIDENCE INN

100 KSF RETAIL / COMMERCIAL

125 KSF RETAIL

DEVELOPERS

2,000+ RESIDENTIAL UNITS

153 KSF CLASS A MEDICAL OFFICE

1,500+ APARTMENT UNITS BY 2028

2,500 PARKING SPOTS

Cushman & Wakefield | Why Orlando

Office Market Snapshot Q1 2024 36.5 MSF Orlando Inventory

CLASS A 22.0 MSF

CLASS B 14.5 MSF

Class A Spotlight

SUPPLY & DEMAND

ORLANDO CBD

3.0M

5.4 MSF Inventory

11.9% Direct Vacancy

$31.69 Direct Rent (FS/SF)

2.0M

1.0M

AIRPORT / LAKE NONA

0.0M

1.6 MSF Inventory

26.2% Direct Vacancy

$35.58 Direct Rent (FS/SF)

−1.0M

2019

2020

2021

2022

2023

2024 YTD

LAKE MARY / HEATHROW

Leasing Activity

Construction Completions

Direct Absorption

3.9 MSF Inventory

17.0% Direct Vacancy

$27.94 Direct Rent (FS/SF)

DIRECT RENTAL & VACANCY RATES

MAITLAND

3.2 MSF Inventory

15.6% Direct Vacancy

$25.70 Direct Rent (FS/SF)

$ 27

15 %

$ 26

10 %

TOURIST CORRIDOR / CELEBRATION 3.7 MSF Inventory 10.6% Direct Vacancy $30.17 Direct Rent (FS/SF) UNIVERSITY / RESEARCH PARK 2.3 MSF Inventory 10.4% Direct Vacancy $27.69 Direct Rent (FS/SF)

$ 25

5 %

$ 24

$ 23

0 %

1Q19

1Q20

1Q21

1Q22

1Q23

1Q24

Direct Rental Rate

Direct Vacancy

Cushman & Wakefield | Why Orlando

Industrial Market Snapshot Q1 2024

Submarket Spotlight 13.2 MSF Manufacturing 12.2 MSF Office Services/Flex 96.2 MSF Warehouse/Distribution

SUPPLY & DEMAND

12.0M

10.0M

8.0M

6.0M

4.0M

2.0M

0.0M

AIRPORT / LAKE NONA

2019

2020

2021

2022

2023

2024 YTD

22.8 MSF Inventory

3.6% Direct Vacancy

$10.35 W/D Rent (NNN/SF)

Leasing Activity

Construction Completions

Overall Absorption

LAKE MARY / SANFORD

8.4 MSF Inventory

3.6% Direct Vacancy

$10.68 W/D Rent (NNN/SF)

DIRECT RENTAL & VACANCY RATES

ORLANDO CENTRAL PARK

$ 12

8 %

$ 10

22.0 MSF Inventory

3.0% Direct Vacancy

$13.62 W/D Rent (NNN/SF)

6 %

$ 8

$ 6

4 %

REGENCY / TURNPIKE

$ 4

2 %

17.9 MSF Inventory

2.8% Direct Vacancy

$8.77 W/D Rent (NNN/SF)

$ 2

$ 0

0 %

1Q19

1Q20

1Q21

1Q22

1Q23

1Q24

SILVER STAR / APOPKA

Direct Rental Rate

Direct Vacancy

21.6 MSF Inventory

18.6% Direct Vacancy

$7.49 W/D Rent (NNN/SF)

Cushman & Wakefield | Why Orlando

EFFECTIVE RENT VS STABILIZED OCCUPANCY RATE Multifamily Market Snapshot Q1 2024 207,098 UNITS Orlando Inventory

ABSORPTION VS COMPLETIONS

93.1% STABILIZED OCCUPANCY RATE Excludes Properties Still In Their Initial Lease-Up Period

$ 2.0k

97 %

15.0k

96 %

$ 1.5k

95 %

10.0k

$ 1.0k

94 %

Effective Rents Increased 25.5% Over the Past Five Years ENDING Q1 2024 AT $1,756 PER UNIT

5.0k

93 %

$ 0.5k

92 %

0.0k

18,153 Units Under Construction AT END OF Q1 2024

2020

2021

2022

2023

2024 YTD

$ 0.0k

91 %

1Q19

1Q20

1Q21

1Q22

1Q23

1Q24

Effective Rent Per Unit

Stabilized Occupancy Rate

Construction Completions

Overall Net Absorption

55,891 Units Delivered SINCE 2019

Over $20.7 Billion In Sales Over The Past 5 Years WITH 2021 RECORD-SETTING $7.2 BILLION

Cushman & Wakefield | Why Orlando

CoStar Data Depicted

Retail Market Snapshot 157.7 MSF Total Retail

Q1 2024

SUPPLY & DEMAND

Product Type Spotlight

3M

4

2.5M

MALLS

2M

1.5M

14.2 MSF Inventory

4.5% Overall Vacancy

$38.88 Overall Rent (NNN)

LAKE

1M

SEMINOLE

500k

POWER CENTERS

0

2019

2020

2021

2022

2023

2024 YTD

10.6 MSF Inventory

3.3% Overall Vacancy

$29.96 Overall Rent (NNN)

ORANGE

Construction Completions

Overall Net Absorption

NEIGHBORHOOD CENTERS

47.2 MSF Inventory

4.9% Overall Vacancy

$27.44 Overall Rent (NNN)

DIRECT RENTAL & VACANCY RATES

4

OSCEOLA

STRIP CENTERS

$ 30

7 %

6 %

$ 25

9.4 MSF Inventory

3.0% Overall Vacancy

$27.28 Overall Rent (NNN)

5 %

$ 20

4 %

$ 15

3 %

GENERAL RETAIL

$ 10

2 %

72.7 MSF Inventory

2.0% Overall Vacancy

$27.74 Overall Rent (NNN)

$ 5

1 %

$ 0

0 %

2019

2020

2021

2022

2023

2024 YTD

OTHER

Direct Rental Rate

Direct Vacancy

3.4 MSF Inventory

1.8% Overall Vacancy

$37.68 Overall Rent (NNN)

Cushman & Wakefield | Why Orlando

CoStar Data Depicted

Market Lead

SOURCES

TownCharts univstats.com U.S. Census Bureau U.S. Bureau of Labor Statistics Visit Orlando Wallet Hub WorldsBestCities.com WUSF News

Florida Review Lightcast.io MacroTrends.net Moody's Analytics Niche 2020 OrlandoAirports.net Orlando Business Journal Tax Foundation, 2021

aaroads.com Business.Orlando.org Chief Executive Magazine,

2022 Biz2Credit CollegeEvaluator CoStar Enterprise Florida ESRI flgov.com

Authors

©2023 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources believed to be reliable. The information may contain errors or omissions and is presented without any warranty or representation as to its accuracy. Cushman & Wakefield does not claim any ownership rights to the corporate logos featured in Why Orlando and their usage in this research report is strictly for illustrative and informative purposes. Why Orlando is intended for limited distribution.