Florida Market Update: September 2026
By Max Downing – Originator
Orlando’s economy and its real estate fundamentals are telling slightly different stories right now, and that gap is worth watching. The metro added 20,600 jobs in the twelve months ending June, a 1.4% growth rate versus roughly 0.3% nationally. Orlando also added more jobs than Miami, Tampa, and Jacksonville combined. The underlying economy is still expanding even as certain property sectors work through slower absorption and elevated supply.
Three developments should be on sponsors’ radar heading into the fall. Florida’s 2026 Live Local Act amendments further expanded and protected qualifying multi-family development opportunities across commercial, industrial and flexible-zoning parcels. Tavistock’s Sunbridge master-planned community continues expanding into Orange County, with Taylor Morrison, Toll Brothers, and Pulte Homes launching neighborhoods across a project ultimately planned for as many as 30,000 homes. Orange County is also in the middle of a mayoral election cycle where housing affordability and transportation infrastructure remain key issues. Each has implications for future supply, land values, and development underwriting.
Multi-family remains soft, but the weakness is not primarily an employment story. Orlando is digesting a major supply cycle at the same time population growth has moderated. Effective rents remain below year-ago levels, but absorption and deliveries are moving closer to balance, construction is slowing, and sequential rent trends have begun improving. The market increasingly looks like it is moving from correction toward stabilization rather than facing a structural demand problem.
Office is showing early signs of improvement. Vacancy is approximately 17%, year-to-date absorption has turned positive, and only about 40,000 square feet remains under construction. Availability is still elevated and the market continues working through several years of negative absorption, but virtually no new supply is entering the pipeline. That supply discipline should become increasingly important if leasing continues to improve.
Industrial presents a different picture. Vacancy remains manageable at approximately 8.4%, but year-to-date leasing volume has fallen sharply from 2025, and roughly 3.1 million square feet remain under construction, with only about one-third preleased. Vacancy has held partly because deliveries slowed alongside demand. Lake Mary/Sanford remains one of the strongest submarkets, but the broader market bears watching as the construction pipeline delivers.
Retail remains one of Orlando’s tightest sectors, with vacancy near 3.9%. Limited new construction, continued population growth, and tourism all remain meaningful tailwinds. Central Florida tourism generated a record $98.6 billion in total economic impact in 2025, while direct visitor spending increased 5% to $62.9 billion.
Financing: The Macro Picture
Commercial real estate lending activity continues to improve, but the recovery is uneven across capital sources. MBA’s Q2 2026 data showed bank and depository originations up 61% year-over-year and CMBS up 68%, while GSE volume declined 17% and life company originations fell 27%.
The life company comparison is beginning to stabilize, however, with originations increasing 15% quarter-over-quarter. Banks and CMBS are currently driving the largest increases in transaction volume, while life companies remain highly competitive for the right stabilized assets where borrowers value long-term fixed-rate execution and certainty of close.
The maturity wall also remains significant. MBA estimates that approximately $875 billion of the $5 trillion in outstanding commercial and multi-family mortgage debt will mature in 2026, followed by roughly $652 billion in 2027 under its methodology. Broader loan-level datasets estimate materially higher figures and project refinancing pressure peaking in 2027. Either way, borrowers should continue underwriting toward an active refinancing environment rather than expecting the pressure to disappear.
Notable Transactions
Recent Florida transactions show capital continuing to move across the risk spectrum.
- Walton Street Capital originated an $85.4 million refinancing for two Orlando-area multi-family communities totaling 532 units. Highland Commercial Mortgage provided approximately $62.5 million of construction financing for the 270-unit Gateway apartment project near downtown Orlando.
- In Miami, Crédit Agricole provided a $125 million construction loan for Sweetbird North, an office and retail development in the Design District, illustrating that large banks are still willing to finance select trophy development opportunities.
- On the smaller-balance side, our firm closed three Florida transactions this month totaling more than $10 million, including a refinance of a six-property office portfolio and long-term fixed-rate financing for office and retail properties in Sarasota.
Orlando remains a market of two speeds. The economy continues to outperform while individual CRE sectors work through different stages of supply normalization. Multi-family is beginning to rebalance, office is showing early improvement with almost no new construction, industrial leasing has slowed despite manageable vacancy, and retail remains tight. At the same time, banks and CMBS are driving renewed lending activity while the market prepares for another substantial wave of maturities in 2027.
