GRS328

So I just got word earlier this afternoon that the Lincoln-affiliate did in fact close on a construction loan for the tower. Up until hearing this news, I didn't think this would project was ever going to actually happen... even with the site work being underway. I figured it was a desperate attempt to make it look more legit and get a lender to sign on. That said, the lender is a non-bank financing company - so they (Lincoln) are paying a hefty premium to get this thing vertical. Not surprising since every bank that looked at this passed on the risk. As a community resident, I am excited this is happening. But it will he interesting to see how it pans out financially if they can't fill up the office space and/or the hotel component doesn't hits its projections.

I generally refrain from participating in these types of discussions, as I tend to find their speculative nature on the silly side (i.e. the somewhat frequent topic of Orlando should host the Olympics, etc.). But when I read Amazon was seeking a second HQ, I immediately thought Orlando could have a legitimate shot. As has been mentioned by other posters, our airport is great, UCF is certainly respectable with regards to its computer science related programs, and our highway network and connectivity to the rest of the state and southeast are superior. To me, it would also seem natural to locate the 2nd HQ on the east coast to complement their Seattle presence. That said, it is somewhat concerning that a frequent complaint among the local tech-entrepreneurial community is the difficulty in locating and/or keeping talent in the area. I also have little faith in our local leadership to put together a persuasive submission that differentiates Orlando from other cities beyond the usual "selling points" (airport, convention center, No. 1 tourist destination, et al). Lack of effective transportation from downtown to the airport is probably a big strike against us, as well. In all honesty, I would not be surprised if Jacksonville becomes a legitimate contender. Amazon has already made major investments there with two fulfillment centers, reportedly a third one on the way, and a delivery station. They have an efficient airport, similarly good access to major roadway networks. Locally, their university is not as strong in terms of UNF vs. UCF. Though Jax is just an 1.5 hours and 2.5 hours from Gainseville and Tallahassee, respectively. Would love to see Amazon come to Orlando, but it would be great if they end up in Florida if it's not here.

True in some cases, more common in office buildings and larger shopping centers than in smaller-scale developments like what are being discussed here. With respect to retail space in multifamily projects a la 420 many lenders don't even consider any income from the retail space at all (or severely discount it) when doing their underwriting since that income is historically very unreliable.

Not that small. Average unit size is 920 sf. Smallest studio is 666 sf. But I admit, it may not be as aggressive as I initially thought since the rents are trended and at stabilization. I initially thought they were today's rents.

$2.19/sf overall, trended.

It's "sleeping" until one or more major corporate tenants commit to pre-leasing a substantial amount of the office space. Until then, it's speculative and will never get financed. It's unfortunate, but it's reality. And while Orlando's job market is extremely strong, it's being driven by tourisim/hospitality (of course) and smaller business, less so large corporate users who could make Tremont a reality. Tampa has the edge on ORL for corporate users and I don't think the Vinik development will help Orlando any (as far as demand for downtown office development goes).

Debt financing request for The Yard is being circulated. The loan request itself is reasonable, but it is premised on some damn-aggressive rents.

More or less, but should be an improvement all the same. This is the same group that rehabbed the District on Baldwin Park Apartments at the SE corner of Semi-annual and Baldwin Park St. Nothing earth shattering - the structures are still the same. But they certainly turned what was basically a neglected dump into a respectable looking apartment complex. I'd expect something similar with Holley Garden.

It'd be fair to say it falls in that same genre. Does already have a presence in greater ORL.

Crescent closed on the land yesterday. Should start moving dirt in January. In addition to the Earth Fare, a very well-regarded burger joint is scouting the site for a few thousand square feet of the remains retail space. It's not a done deal, but would be a great addition to this area of town of it happens. This project will be one of the better mixed-use executions in Orlando.

I don't think Tremont's not proceeding (if that proves to be the case) is a sign of a downtown being in decline. It's more just a matter of economics particularly with respect to the current office market. Class A office space in Orlando CBD is doing very well, and there are certainly companies that would love to be there. But the costs of a building like Tremont will require substantial pre-leasing commitments in order to be able to achieve financing. All of these developments require some hybrid of equity and debt to finance the construction. The debt is required for the equity investors to achieve their required returns. In order to get the debt, the lender needs to be assured the project is sufficiently pre-leased so that it can pay back the debt. I saw some numbers on Tremont Tower over a year ago. They had some LOIs from some prospective tenants (including Fairwinds), but nothing concrete, and even the office space would have only been about 30% pre-leased. Most lenders - especially bank lenders - can't take a flyer like that. Another part of the problem, too, is cost. Costs to build that thing are substantial. And the rents required to justify that cost just aren't there in Orlando at this time. I suspect that may be why they are having a hard time finding tenants. Lots of smaller local companies would love to be downtown, but they're not willing to pay rent commensurate with more attractive markets (e.g. Miami, et al) in Orlando. Now, as I mentioned in my earlier post - if they have a larger corporate tenant in their back pocket who is prepared to relocate to ORL and take 125,000 - 150,000 sf of the Tremont Tower's 2000,000 sf of office space, then it suddenly becomes more plausible. I would love for that to be the case. Guess we'll see. The problem with that is most large users who are looking to relocate will want to have the space available within a timeframe generally much shorter than it will be required to deliver the space. That's the quandary Orlando - and other growth markets - are in with respect to building new office towers. There are firms across the country who would love to relocate here, but they need a lot of floor space that doesn't currently exist right now, but they're unwilling or unable to wait the 2+ years it would take for such space to be developed. Orlando's challenge is somewhat magnified compared to others in that it really doesn't have much of a base of substantial corporate users already located here. Downtown office is dominated by law firms (which many are downsizing), banks (most of which are HQ'd elsewhere) and Red Lobster.

I'm not inclined to believe it is a real thing. Unless they've got a large corporate user planning to relocate in their back pocket or they've got plans to do this with alternative-type financing (both of which are a stretch IMO), I just do not see this one getting off the ground.

Sheesh..... The article doesn't disclose how much they're paying for the naming rights. Hopefully it's a healthy sum to compensate for the horrific name.

Excerpt: "Marriott flag AC Hotels will be introduced to the Orlando market via downtown mixed-use project Tremont Tower, with development partner Lincoln Property Company swapping in the contemporary urban brand for previous placeholder Hyatt Place, the company told GrowthSpotter on Monday." AC Hotel is comparable to Boheme, certainly more upscale than Hyatt Place, so definitely strong news for downtown. The article reports the 18th floor will feature a lobby bar and amenity level with outdoor patio seating overlooking Downtown Orlando,

A financing package from Lincoln Property for Tremont Tower has been floating around since last fall that suggested the hotel component would be an AC Marriott and not the widely reported Hyatt Place. Looks like it has just been confirmed by GrowthSpotter. http://www.growthspotter.com/projects/tremont-tower/gs-tremont-tower-new-hotel-flag-ac-hotels-by-marriott-20160411-story.html

They got their financing, too. Never thought that would happen. Every bank in town (and out of town) passed on this deal because of the economics. Apparently though, the developer group reconsidered its financial commitment and came back around with more modest loan terms requested. Even then, it took a financial institution with a generally higher risk tolerance to sign up. But it certainly looks like it's a go at this point.

This is a topic of great interest to me and I think I brought this up somewhere on these boards years ago, when I was relatively new to the Orlando area. Back then I was young and stupid. I am much older now and… less stupid, and I have gained more insight into the topic over the years. That said, I’m still not entirely sure what I think would be the best arrangement for the shaping of the region. While I completely understand the benefits of city/county consolidation, I am still inclined not to be a proponent of it. My primary concern against it is the identity and continuity of a city unit and the dilution thereof that would result in a consolidation, especially in the case of a geographically large area. What I would much rather see is for the city to round out its rather ridiculous current boundary lines and fill in the logical unincorporated urban gaps (e.g. S. Orange, Old Cheney/Colonial area, unincorporated pockets along S. OBT/Holden Heights area, etc.) and for the remaining developed unincorporated areas on the periphery to incorporate into their own self-governing town/communities. For example, I would like to see Waterford, Avalon Park, Hunters Creek, Goldenrod/Aloma, Pine Hills, etc. incorporate into independent towns/cities (I hesitate to call suburban communities "cities"). Orlando, as defined by its official city limits, is heavily suburban in nature, considering that areas like Metrowest, Lee Vista, and now Lake Nona are all within “city limits”. I would rather not see further suburbanization of Orlando with the consolidation of unincorporated county lands into city limits. Other than superficially boosting total population figures for the city, a la Jacksonville, I don’t see the benefit from the perspective of the character of the City and the region as a whole. I’d rather see the City of Orlando focus on its core and devote optimal resources to making that core great, while allowing the peripheral communities to develop according their own unique characters ultimately serving as secondary communities to the core urban area. In my eyes, Winter Park is an excellent example. It is a thriving community with a very distinct character of its own, yet it is very clearly secondary to Orlando in the larger scheme of the region. Orange County is not set up for optimal urban governance, and I would argue that it shouldn’t be in the first place. This is evident in the very noticeable divide in parts of town where there are unincorporated pockets amongst incorporated city areas, as Jernigan alluded to in his post. I would argue that consolidation of the City and County would dilute the effectiveness of the City as far as planning and development go, making it more like the County than vice versa, i.e. stretched too thin. Let Orlando focus on making its traditional urban area great and let the peripheral communities direct their own affairs. Let the County handle broader, non-urban, services. Maybe this is all splitting hairs. My thoughts on this are certainly influenced from having grown up in another area where the separation of county and cities within were more clear. And my perceived benefits are certainly more abstract in nature than the easily identifiable efficiencies that would be gained in a consolidation. I also realize the idea of incorporating numerous additional cities/towns is highly unlikely given the procedural hurdles, not to mention budgetary constraints among other reasons. But I think it would ultimately help better shape our region as a whole with stronger communities while enhancing the urban core as a more distinct, dynamic and desirable place overall. Totally off thread's topic... I apologize in advance.

My thoughts exactly. The amount of coverage OBJ gives this project is nauseating. Makes we wonder what the connection is? Regardless, I've been skeptical from the beginning based on the developer's track record - or lack thereof - with a project even remotely comparable to what's proposed. I'm even more skeptical now given its reportedly heavy reliance on international financing, meaning this project has gotten drastically more expensive for investors over the last several months as the dollar has strengthened.

Got a chance to do a walkthrough on Artisan 420. I am by no means a construction expert, but I have to say this thing seems like it is really being well built. It is rock solid from what I could see. Concrete everywhere, even in the bowels of the structure. The pool deck sounds like it is going to be incredible. Also, it sounds like they are getting some good activity regarding pre-leasing of the ground level retail, with a mix of both local establishments as well some national brands expressing interest.

Not sure that the economics are there to support it. And I just don't have that much confidence in the developer based on what I've seen and heard. Not saying I don't hope it doesn't happen as proposed - I do. I just don't have much confidence it will.

I'm not a betting person, but I'd be more than comfortable putting money down that Citi Tower doesn't happen. At least not in it's current form.

You know what stands out to me most in the top, aerial, render? Just how sad and depressing the block, and it's occupant building, the former Old Southern Bank (Tetris) tower, is... but I digress. As for the topic of this thread, any infill west of Orange excites me. Hope it has legs.

No construction financing in place as of yet.

Not a headline, per se, but came across this interesting commentary on our fair city at http://www.newgeography.com/content/004804-central-florida-stepping-into-deep-density While clearly negative in tone, I do think the author makes some good points to consider - particularly about the vacancy rate for office space. I think his assetions regarding national chains, etc., is more of a national trend than just a problem of Orlando's, which is what he seems to be implying.

I am completely in line with the general premise presented by other forumers and would certainly want to see a project with ground floor retail space - especially at this location. But that being said, I honestly wouldn’t be surprised if it turned out that it is truly not in the developer’s plans for this proposed project. I say this from a strictly economic perspective. Think of many of the larger-scale projects that have been built downtown over the past 7-10 years - Vue, 55 West, SkyHouse, Camden Apartments, 101 Eola, Sanctuary, etc. All had their first floors largely dedicated to retail space. And each either sits mostly empty or can't seem to generate or sustain thriving tenants, e.g. 55 West and Sanctuary. So, given this, I could see a developer not wanting to dedicate much, or any, space to retail in a forthcoming project. From their perspective, it may viewed as wasted space, which of course equals wasted dollars. So, the question in my mind become why does the retail space that exists in these downtown projects struggle to attract tenants and subsequently thrive? A bit off topic, and obviously a recurring theme on these boards. But something to consider given the possibility that this potentially major new development may forgo dedicated retail space altogether.