Orlando, Fla.–area builders and developers are hoping that Walt Disney World frees more of its local real estate empire for residential development.
In recent months, Disney uncharacteristically has put up for bid small parcels from the 27,000 acres it owns in greater Orlando's southwest Orange and northeast Osceola counties. In December 2005, Centex paid $4.8 million for 47 acres north of Disney's Magic Kingdom theme park. Two months later, Sherberth Development Partners bought 53 acres for $15.4 million. And in March, Disney offered another 30 acres and told the Orlando Sentinel that it was “evaluating” its holdings. Prior to those deals, Disney hadn't sold land for development outside of its own master planned communities since 2000.
Centex's division president, Pat Knight, wasn't available for comment at press time. But Susan Lawrence, president of the Orlando-based consultant Real Estate Strategies, says that developers relish being near Disney's parks because “they have built-in marketing. People will buy homes on the Internet, sight unseen, if they're near Disney.” Realistically, market watchers think that Disney is simply disposing of property that doesn't fit its growth plans at a time when land prices around Orlando have soared. Lawrence says that even on the market's fringes, lots zoned for two to four homes go for $50,000 to $80,000 per acre, more than double the bid price only a few years ago.
Finding land is another matter. Seminole County, just south of Orlando, is all but built out, and Orange County is fast approaching that point. “All the growth is in Osceola County,” says Charlie Robertson, president of the HBA of Metro Orlando and owner of Harmony, Fla.–based Robertson Homes. Some builders are heading even farther west and south, but building there isn't a cakewalk, either. In Lake County, west of Orlando, Lawrence says that zoning commissioners are unwilling to accommodate new-home development because the schools there are overcrowded.
Learn more about markets featured in this article: Orlando, FL.