OPINION: Does COVID-19 Mark the Top of the Orlando Building Boom?

[Jvest55]

Orlando has been at a furious pace adding new construction projects, both residential and commercial. I think some developers have over leveraged themselves with projects such as Camden 520 for example. Just a couple months ago they announced plans to market a good portion of the apartments to short-term residents, like an Airbnb model. My first thought was, why are they even considering that if rental demand was through the roof. My thought now is, they seem a bit screwed (as well as everyone) If there is no vaccine for 14-18 months, which is what is projected. That's a long time of no recreational activities and travel, and no short term leases.

As much as I'd like Orlando to keep growing, I think this is an interim top in development.

We may see new projects that have barely broken ground pause, or reverse completely. A recession for as long as a year will force lots of companies to reduce their workforce which is also not good for the rental market obviously. The idea of hoping business will rush into downtown and buy very expensive leases such as in the new building on Church Street, seems extremely unlikely now. 

Brace for impact, It's gonna get bumpy. 

What do you think?

Edited March 17, 2020 by Jvest55

[IAmFloridaBorn]

I certainly believe so.

[codypet]

I agree.  I think we're gonna be in a bit or recession for a while.   With the market reacting the way that it is and everyone being home, the after effects are going to vibrate for months.   (Who's buying tvs, cars, etc right now?)  Like in 2008 we appear to be entering a recession right at the doorstep of a presidential election.  Not saying its a specific party's fault.  Just saying its interesting its happening again leading up to an election.

Edited March 17, 2020 by codypet

[sethM]

100% - Should help rent prices come down in the next year as well. 

This thing is going to have a huge impact on lot of Orlando residents because of how hard it’s impacting the hospitality and entertainment industry. Lots of people with zero salary over the next couple months. Plus the upcoming recession. 

[popsiclebrandon]

A lot will depend on how well we and the rest of the world handle this virus. If we can get things contained and treated in the next 2 months I think we'll be ok. The rental prices in Orlando aren't sustainable based on income here so maybe we'll see a long overdue correction there and therefore a few projects never happen. Most job losses from this are going to be in hospitality which are jobs that can be quickly brought back when tourism and related industries rebound.

I mean people here aren't taking it seriously now so I'm sure the day they re-open Disney it will be packed and that segment will quickly rebound.

[Dale]

I predict enormous, pent-up demand - the opposite of panic - if the virus burns through in a matter of weeks.

[leondecollao]

The building boom is certainly over. Lenders are essentially frozen and people will wait for some level of certainty before they invest in any new projects. 

[Dale]

42 minutes ago, leondecollao said:

The building boom is certainly over. Lenders are essentially frozen and people will wait for some level of certainty before they invest in any new projects. 

Certainty will return as soon as the virus runs its course.

[jack]

11 hours ago, Jvest55 said:

Orlando has been at a furious pace adding new construction projects, both residential and commercial. I think some developers have over leveraged themselves with projects such as Camden 520 for example. Just a couple months ago they announced plans to market a good portion of the apartments to short-term residents, like an Airbnb model. My first thought was, why are they even considering that if rental demand was through the roof. My thought now is, they seem a bit screwed (as well as everyone) If there is no vaccine for 14-18 months, which is what is projected. That's a long time of no recreational activities and travel, and no short term leases.

As much as I'd like Orlando to keep growing, I think this is an interim top in development.

We may see new projects that have barely broken ground pause, or reverse completely. A recession for as long as a year will force lots of companies to reduce their workforce which is also not good for the rental market obviously. The idea of hoping business will rush into downtown and buy very expensive leases such as in the new building on Church Street, seems extremely unlikely now. 

Brace for impact, It's gonna get bumpy. 

What do you think?

If you can get financing, the best course of action is to get under construction as fast as possible and build your way through the recession. Typical garden style apartments can turn units in 14 months and 2 yrs for mid to high rise. If you can start construction this summer, you will be delivering units end of 2021. 

Assuming this does not last any longer than a year, the timing will be perfect. 

[nite owℓ]

This is a topic for the Coffee House, but I'd like to hope that we're not headed into a recession.

Common coronavirus infections occur every year w/mild symptoms, but they have potential to cause serious respiratory illness. We've been here before (SARS, MERS) and now SARS-CoV-2 which causes COVID-19 aka "coronavirus disease 2019". I don't remember people freaking out like this during previous outbreaks -- even when a local teen passed away from one of the more serious coronavirus diseases in the past. Now I'm getting emails from my banks, utility company, and pretty much any business entity w/my email telling me they are prepared and "here for me" .

As for a vaccine: viruses constantly change so they will have to release an updated "vaccine" every season. We barely even have appropriately matched flu vaccines every season (and now we're supposed to come up with a coronavirus vaccine??) but that's just my opinion. When novel/new coronaviruses or influenza viruses emerge, all of the news outlets will be there there help spread pandemonium again. There will always be a bird flu, coronavirus, human influenza, etc. so if anything, we are fortunate to live in an age that we somewhat understand the modes of transmission (vs living in the dark ages). We should practice proper hand hygiene year-round and be mindful to follow practices to limit the spread of viruses during peak seasons regardless. Nothing will change until we make this knowledge part of our culture and change the way the general public practices contact/droplet/airborne precautions in the future.

Stick with reliable sources for information: https://www.cdc.gov/coronavirus/2019-ncov/cases-updates/summary.html?CDC_AA_refVal=https%3A%2F%2Fwww.cdc.gov%2Fcoronavirus%2F2019-ncov%2Fsummary.html

[bqknight]

1 hour ago, nite owℓ said:

This is a topic for the Coffee House, but I'd like to hope that we're not headed into a recession.

Common coronavirus infections occur every year w/mild symptoms, but they have potential to cause serious respiratory illness. We've been here before (SARS, MERS) and now SARS-CoV-2 which causes COVID-19 aka "coronavirus disease 2019". I don't remember people freaking out like this during previous outbreaks -- even when a local teen passed away from one of the more serious coronavirus diseases in the past. Now I'm getting emails from my banks, utility company, and pretty much any business entity w/my email telling me they are prepared and "here for me" .

As for a vaccine: viruses constantly change so they will have to release an updated "vaccine" every season. We barely even have appropriately matched flu vaccines every season (and now we're supposed to come up with a coronavirus vaccine??) but that's just my opinion. When novel/new coronaviruses or influenza viruses emerge, all of the news outlets will be there there help spread pandemonium again. There will always be a bird flu, coronavirus, human influenza, etc. so if anything, we are fortunate to live in an age that we somewhat understand the modes of transmission (vs living in the dark ages). We should practice proper hand hygiene year-round and be mindful to follow practices to limit the spread of viruses during peak seasons regardless. Nothing will change until we make this knowledge part of our culture and change the way the general public practices contact/droplet/airborne precautions in the future.

Stick with reliable sources for information: https://www.cdc.gov/coronavirus/2019-ncov/cases-updates/summary.html?CDC_AA_refVal=https%3A%2F%2Fwww.cdc.gov%2Fcoronavirus%2F2019-ncov%2Fsummary.html

SARS infected 8,000 people worldwide and caused 774 deaths. MERS infected ~2,500 people worldwide and caused ~800 deaths. 

COVID-19 has infected 189,000 and killed ~8,000 and we've barely even contained it.

If we didn't/don't take these measures upward of 1MM AMERICANS could die. How do you not see the difference?

[Jvest55]

1 hour ago, nite owℓ said:

This is a topic for the Coffee House, but I'd like to hope that we're not headed into a recession.

respectfully, this crisis is not "off topic". Not even close. 

Edited March 17, 2020 by Jvest55

[HankStrong]

I don't know where it belongs on this forum, but it is certain ON TOPIC.

 

I believe in staying calm, using good hygiene, and making smart decisions.  That said, dismissing it as just people freaking out because we made it through SARS & MERS is just not sound thinking.

I hate that it seems to becoming TP Hoarders vs. COVID Deniers.  

 

This could become very horrible for many people, even those who never got sick, because jobs could be lost and businesses could close.  Not to mention the whole death thing and how under-prepared our nation's healthcare system is for both the realities of pandemics & the cost to the public of them.  I have always believed (and continue to believe) that feeding, educating, and healing our population should be the three largest points of focus for a country to be called the greatest nation on Earth.  Even though some things may seem like overreaction, I support them because they fall in line with those 3 things.

[Jvest55]

Just a tip of what is to come:

Burbank, California-based Walt Disney Co. (NYSE: DIS) has shuttered construction operations at Disney World as coronavirus continues to impact Central Florida's once booming building industry, according to the head of the region's top construction trade organization. It wasn't immediately known if construction workers will be paid or when construction operations will resume, said Mark Wylie, president and CEO of the Central Florida chapter of Associated Builders & Contractors Inc.

Wylie expects other Central Florida construction sites to shut down, as well.

"They're going to be closing a lot of construction sites," Wylie said of the Central Florida region. "It's already having a terrific impact on the economy."

"Everything from feasibility to pricing, discounting and construction. This will halt the construction on these projects and delay everybody. What will the delays be — is it one to three months? We don’t know," said Dennis Speigel, founder and CEO with International Theme Parks Service Inc., Cincinnati-based theme park consulting firm. 

https://www.bizjournals.com/orlando/news/2020/03/17/breaking-walt-disney-world-shuts-down-all.html

 

Pass this along if you know a small business hurting in Orlando:

The application period for the recently activated Florida Small Business Emergency Bridge Loan program opened Tuesday for companies whose cash flows have been negatively impacted by the coronavirus pandemic. But through May 8, small business owners with two to 100 employees can apply for the short-term interest-free loans of up to $50,000. Up to $50 million has been allocated for the program, according to Gov. Ron DeSantis. To qualify, businesses must have been established before March 9 and be able to demonstrate the impact that the coronavirus has had on their cash flows. Businesses with questions about the program can email [email protected] or call (866) 737-7232.

 

Edited March 17, 2020 by Jvest55

[JFW657]

Everything depends on what the virus does.

If the warm summer temperatures cause it to die off early, we could be back up and running again sooner rather than later.

 

[HankStrong]

16 hours ago, JFW657 said:

Everything depends on what the virus does.

If the warm summer temperatures cause it to die off early, we could be back up and running again sooner rather than later.

 

It is such an unknown.  If this breaks quickly in certain hot regions, they will recover quicker.  If it doesn't break for anyone, it's going to be a nightmare.  If it breaks for everyone, we all win.  It is insane to think about how little we know about what is going to happen.

I've seen it shared dozens of times, but the statement is true.  We will probably never know for sure (many may claim) if we over-reacted to this virus, but we will 100% know if we under-reacted.  

[sethM]

There’s no evidence to support the virus breaking down in warm weather like the flu. 

Either way I don’t think the economy is going to bounce right back, we’re too far down the path of recession to rewind. 

[TRENCH]

1 hour ago, sethM said:

There’s no evidence to support the virus breaking down in warm weather like the flu. 

Either way I don’t think the economy is going to bounce right back, we’re too far down the path of recession to rewind. 

yeah im not sure where that "standing on the beach kills the virus" WhatsApp fakery came from 

Wyndham lake buena vista just laid off roughly over 100 people... many of them managers and employees who been there 6+ years. the same with many jobs.. firing people out of nowhere

 

The fact republicans and libertarian politicians are suddenly clamoring for UBIs is telling me something. .. we're not bouncing back anytime soon 

Edited March 18, 2020 by W7edwin

[jrs2]

22 hours ago, Jvest55 said:

respectfully, this crisis is not "off topic". Not even close. 

yeah, but it should be in the coffee house like Niteowl suggested.  otherwise, you might as well have a Wall Street thread or a Dow Jones thread or a thread on every subject that can affect whether the economy goes boom or bust.

[popsiclebrandon]

It affects everything and is really the only major thing happening. It should stay on the main forum imo.

Edited March 18, 2020 by popsiclebrandon

[JFW657]

Let's take poll!!!! 

[Jvest55]

14 minutes ago, jrs2 said:

yeah, but it should be in the coffee house like Niteowl suggested.  otherwise, you might as well have a Wall Street thread or a Dow Jones thread or a thread on every subject that can affect whether the economy goes boom or bust.

I don't want the thread to become why this should stay in the main topic area, but I don't think you understand the gravity of the situation.

This is the fastest and broadest economic contraction most of us have ever seen in our life. The effects are already in place. Hundreds of millions of people are no longer working or working from home. Business are shuttered and the clock is ticking on debt payments everywhere. This is not a "Dow Jones" news topic that comes and goes. There is a reason why I put it in the main topic, to get the attention of people who think otherwise. 

Mortgage rates have dropped, yet, people will find it hard to close deals when lenders try to verify employment. In fact, many recorders are not even coming to work anymore to close loans depending in the state, the same for property appraisers. So Americans can't even take advantage of this. This is a cash crunch. Orlando has offered up to $50K for any small business that meets their criteria because they literally won't have money to pay bills. Every American might get $1,000 check (not saying that helps) but my point is, this is an important topic. Our little interest in Orlando skyscrapers and building construction is not very important right now, as people get infected and hospitals are overtaken and commerce screeches to a halt.

Do you have a job? Will you have a job soon? I mean, wake up!

[jrs2]

14 minutes ago, Jvest55 said:

I don't want the thread to become why this should stay in the main topic area, but I don't think you understand the gravity of the situation.

This is the fastest and broadest economic contraction most of us have ever seen in our life. The effects are already in place. Hundreds of millions of people are no longer working or working from home. Business are shuttered and the clock is ticking on debt payments everywhere. This is not a "Dow Jones" news topic that comes and goes. There is a reason why I put it in the main topic, to get the attention of people who think otherwise. 

Mortgage rates have dropped, yet, people will find it hard to close deals when lenders try to verify employment. In fact, many recorders are not even coming to work anymore to close loans depending in the state, the same for property appraisers. So Americans can't even take advantage of this. This is a cash crunch. Orlando has offered up to $50K for any small business that meets their criteria because they literally won't have money to pay bills. Every American might get $1,000 check (not saying that helps) but my point is, this is an important topic. Our little interest in Orlando skyscrapers and building construction is not very important right now, as people get infected and hospitals are overtaken and commerce screeches to a halt.

Do you have a job? Will you have a job soon? I mean, wake up!

No offense taken.

I am awake.  And I employ several people.

[HankStrong]

2 hours ago, sethM said:

There’s no evidence to support the virus breaking down in warm weather like the flu. 

Yes,  I certainly don't believe that warm weather is the cure either.  However, I'm not an expert.  My comment was simply that if it does, that's great.  If it doesn't, that stinks.

I have no idea how long it will last and what will kill it or not.  I know that social distancing seems like a great idea.  The fewer people you interact with, the fewer people can give it to you.

[JFW657]

41 minutes ago, HankStrong said:

Yes,  I certainly don't believe that warm weather is the cure either.  However, I'm not an expert.  My comment was simply that if it does, that's great.  If it doesn't, that stinks.

I have no idea how long it will last and what will kill it or not.  I know that social distancing seems like a great idea.  The fewer people you interact with, the fewer people can give it to you.

I'm retired so I pretty much stay home all the time anyway,  

Ergo, no big lifestyle change for me other than that I might start doing my grocery shopping late at night, even after midnight, in order to avoid  close proximity to people. 

One of the advantages of being a Walmart shopper I guess.