More luxury condos moving forward on Lake Whippoorwill – GrowthSpotter

Two multifamily developers with an established presence in the Lake Nona submarket are preparing to begin construction on two of the last undeveloped parcels of land along Lake Whippoorwell.

Cornerstone Group, A Broxton Partners Affiliate, and Bainbridge Companies It will add 458 luxury apartments to the Narcoossee Road corridor between Dwell Nona Place and Bainbridge’s Mission Pointe community, which was completed earlier this year.

Mission Pointe is finalizing the initial lease, said Bob Thollander, president of development for the South Florida company. “That was 300 units, and it was very strong leasing,” he said. “We’re sitting at nearly 90% leased. It’s been very well received.”

Now Bainbridge is seeking permits from Orlando for the second phase of the community immediately to the south, which will add another 176 units. “We hope to be ready by the end of the year to start construction in January,” he added.

The architecture of Mission Pointe 2 will match the first phase he designed Scott + Cormia. Bainbridge is expanding the pool deck and plumbing to accommodate more residents while adding new amenities in the second phase, Thollander said.

“We will have a kayak launch with paddle boards, pickleball courts and other amenities on the waterfront,” he said.

The second phase is expected to open in 2025 and will be used as the leasing office in the first phase.

Scott + Cormia also designed the One Nona Plaza project at Cornerstone, which will rise on 7.3 acres just south of Mission Pointe 2, consisting of 282 units with a 5-story parking garage. This will be one of the first luxury residential communities on Lake Whippoorwill to set aside 10% of the units as affordable. The leasing center will face Narcoossee to create a seamless transition from commercial to multifamily frontage, and will contain rentable workspaces to create live/work opportunities for residents. The pool and clubhouse are located near the lakefront, overlooking a one-acre pond.

Annabelle Fowler, marketing director at S+C, said she submitted applications for site development and building permits this month.

This will be Cornerstone Group’s second project in the Lake Nona area following the completion of the Urbon@Nona project in 2020. Cornerstone Group also completed the 361-unit Urbon@Audubon Park project in 2020 and has an adjacent sister project in the pipeline.

Both Narcoossee Way projects will widen Pioneer Way to create cross-community access to the north and south and will complete the multi-purpose trail along the lakefront providing pedestrian connectivity. Two wooden piers will remain in place, according to previously drawn up plans Kimley Horn.

Orlando has been one of the most active markets for new multifamily construction over the past three years, but experts are already seeing a slowdown in new construction this year — a trend they expect to continue into 2024.

A recent report from institutional property advisors Marcus & Millichap noted that Orlando saw a moderate 29% decline in the number of new units under construction in the second quarter of 2023 compared to the average number of quarterly units started from the previous two years.

Other markets, such as Houston and Austin, have seen construction declines by 75-80%.

Big banks were generally targeting less significant capital allocations to real estate in early 2023, noted Greg Willett, national director of research. “Similarly, many smaller banks made adjustments to their strategy when a handful of regional lenders failed over the spring.” . “All sources of development capital also faced more difficult financial challenges on new projects when the pace of rent growth slowed compared to previous records and when operating expenses – especially insurance costs – rose above previous norms.”

Bainbridge has backed away from some deals but is still going full steam ahead on several projects, Thollander said. The company completed the Bainbridge Nona North project on Wetherbee Road a few months ago and will deliver Bainbridge Grande and Bainbridge Sand Lake in mid-2024. The first phase of the Bainbridge Global Center is also under construction and is scheduled to open in 2025.

Thollander said the company already has its funding for Mission Pointe 2 and several projects in other states, but he expects to see a further slowdown in new multifamily starts in Orlando through the end of the year.

“I think the big problem facing my competing developers, as well as any development project right now, is that construction financing has actually gotten tighter,” Thollander said. “They lowered their loan-to-value ratio in order to have a higher debt service coverage ratio. They tightened their internal collateral, so they are only lending 50 to 55% of the loan value, so that creates a big problem for all of us.

Do you have advice about developing in Central Florida? Contact me at lkinsler@GrowthSpotter.com or (407) 420-6261, or tweet me at @LKinslerOGrowth. Follow GrowthSpotter on Facebook, Twitter And LinkedIn.