Invest: Orlando 2020

Orlando 2020 An in-depth review of the key issues facing the Orlando-Kissimmee-Sanford MSA, featuring the exclusive insights of prominent industry and political leaders.

2 | Invest: Orlando 2020 | CONTENTS

Contents: 5 Economy: 4 Economy in numbers:

6 Speedy recovery?: Diversification could be the key to a quick rebound once the specter of COVID-19 passes

7 Interview: Jerry Demings, Mayor, Orange County 10 Interview: Buddy Dyer, Mayor, City of Orlando 12 Interview: Betsy Gardner Eckbert, President & CEO, Winter Park Chamber of Commerce 14 Interview: Erin Brown, Partner, Brown Immigration Law 16 Roundtable: Business attraction 18 Interview: Jason Brodeur, President & CEO, Seminole County Regional Chamber of Commerce

21 Real Estate: 22 Growth ambitions: Despite the added layer of complexity from COVID-19, Orlando is confident it can maintain its real estate boom

23 Interview: Amy Alvarado-Plank, Director of Sales and Marketing, Legacy Pointe at UCF 24 Interview: Steven McCraney, President & CEO, McCraney Property Company 26 Roundtable: Commercial focus 29 Interview: Sandi Bargfrede, Managing Partner, ACRE Commercial Real Estate 30 Interview: James Zboril, President, Tavistock Development 33 Interview: Craig Ustler, President, Ustler Development 34 Market voices: Investment Opportunities

37 Construction

47 Interview: Mark Israel, President & CEO, Universal Engineering Sciences

& Logistics:

52 Mobility goals: The city is working to solve the transportation mobility puzzle with one eye on the future

53 Interview: Phil Brown, CEO, Orlando International Airport

54 Interview: Diane Crews, President & CEO, Orlando Sanford International Airport

38 Hungry: The construction sector was booming prior to the pandemic and all signs suggest the industry remains on a growth footing

39 I nterview: Tim Dwyer, Regional President, Brasfield & Gorrie LLC

40 Interview: Allen Finfrock, CEO, FINFROCK

41 Interview: Scott Lyons, Business Unit Leader – Southeast Region, DPR Construction

46 Good investment: A multibilliondollar infrastructure program launched in 2017 appears to be paying dividends

56 Interview: Terry Lloyd, Director of Aviation, Kissimmee Gateway Airport

62 Strong footing: The short term is uncertain but banking fundamentals solidified in 2019 and look to continue moving forward

63 Interview: Evan Wyant, Orlando Market President & Senior Vice President, BB&T, now Truist

64 Interview: Derek Jones, North Central Florida Region Bank President, Wells Fargo

65 Interview: Marty McAndrew, Commercial Banking North Central Florida Market Executive, Wells Fargo 67 Interview: Jorge Gonzalez, President & CEO, City National Bank of Florida

68 Interview: Alfred Rogers, Executive Vice President & Chief Lending Officer, Valley National Bank

69 Market voices: Accounting and financial services

71 Interview: Julie Kleffel, Executive Vice President & Community Banking Executive, Seacoast Bank

74 Interview: Kevin Miller, President & CEO, Addition Financial

75 Market voices: Areas of growth

77 Healthcare:

42 Market voices: COVID-19 44 Roundtable: Building success

86 Interview: Tony Jenkins, Central Florida Market President, Florida Blue

89 Education:

90 Top grades: With an abundance of good schools, Orlando is primed for continued educational success

91 Interview: Rob Panepinto, Director of Innovation Districts Strategy & Partnerships, University of Central Florida

92 Interview: Grant Cornwell, President, Rollins College

95 Interview: Garry Jones, President, Full Sail University

96 Interview: Georgia Lorenz, President, Seminole State College of Florida

61 Banking & Finance:

& Infrastructure:

82 Interview: David Strong, President & CEO, Orlando Health

49 Interview: Greg Meyer, Principal, Stantec

51 Transportation

78 What next?: COVID-19 will reshape how healthcare operators provide service but a solid foundation will help the sector move forward

79 Interview: Daryl Tol, President & CEO, AdventHealth–Central Florida Division

80 Interview: Trey Abshier, CEO, Central Florida Regional Hospital

99 Tourism, Arts & Culture:

100 Magic: The home of the Magic Kingdom continues to cast a spell on visitors, and a rebound from COVID-19 is likely

101 Interview: George Aguel, President & CEO, Visit Orlando 102 Interview: Greg Allowe, President & Managing Partner, The Delaney Hotel 105 Interview: Mark Tester, Executive Director, Orange County Convention Center 107 Interview: Pia Brenan, General Manager, Park Plaza Hotel 108 Market voices: Hotels

109 EXECUTIVE GUIDE – Legal Services:

110 Consolidation: 112 Interview: William Dymond, CEO & President, Lowndes, Drosdick, Doster, Kantor & Reed, P.A. 114 Market voices: Focus areas 115 Interview: Michael Okaty, Office Managing Partner, Foley & Lardner LLP 116 Interview: Kate Saft, Partner, Greenspoon Marder 117 Market voices: Tech growth 118 Interview: Jennifer Williams, Managing Partner – Orlando Office, Ernst & Young 119 Interview: Francis Sheppard, Managing Partner, Rumberger, Kirk & Caldwell 120 Interview: Glenn Adams, Executive Partner - Orlando, Holland & Knight www.capitalanalyticsassociates.com

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EDITORIAL NOTE

Orlando 2020

From the publisher:

ISBN 978-0-9988966-1-8 President & CEO: Abby Melone

Dear readers,

Chief Financial Officer: Albert Lindenberg Regional Director: Jack Miller

By now, it is apparent that the COVID-19 pandemic that has raced around the globe from the beginning of January 2020, rupturing world markets, will have a lingering impact on our lives and businesses. At the time of printing Invest: Orlando 2020, countries around the world, including the United States, were at various stages of emerging from measures to contain and mitigate the pandemic, beginning with social distancing efforts and other social curbs, and in some cases culminating in the imposition of national states of emergency.

In the United States, which became a focal point for the pandemic in March 2020, measures included a $2.2 trillion economic rescue package agreed by Congress in late March to help businesses big and small, as well as individuals, to cope with the dramatic economic fallout as the virus spread. By early June, businesses were starting to reopen, although the full impact of the virus remained unknown.

Many of the interviews in Invest: Orlando were conducted prior to the pandemic’s outbreak, but we have endeavored to reflect recent events throughout our editorial. Those interviewees who were able to comment on the potential long-term impact agree that the U.S. economy remains resilient, and most are optimistic that any downturn will be relatively short-lived. The economy’s underlying strength, many business leaders believe, will drive greater growth over the long term.

Capital Analytics shares this optimism. Especially at this difficult time, Capital Analytics remains steadfast in our purpose: to deliver in-depth business intelligence through its print and digital platforms. Now more than ever, information is not only necessary, it is vital.

Senior Editor: Mario Di Simine Art Director: Nuno Caldeira Regional Editor: Max Crampton-Thomas Writers: S ean O’Toole; Sara Warden, Tomas Sarmiento, Esteban Pages Contributing Writer: Felipe Rivas Editorial Assistant: Claudia Martinez Invest: Orlando is published once a year by Capital Analytics Associates, LLC. For all editorial and advertising questions, please e-mail: contact@capitalaa.com To order a copy of Invest: Orlando 2020, please e-mail: contact@capitalaa.com All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, without the express written consent of the publisher, Capital Analytics Associates, LLC. Whilst every effort has been made to ensure the accuracy of the information contained in this book, the authors and publisher accept no responsibility for any errors it may contain, or for any loss, financial or otherwise, sustained by any person using this publication.

Capital Analytics Associates, LLC accepts no responsibility for the return of unsolicited manuscripts and/or photographs, and assumes no liability for products and services advertised herein. Capital Analytics Associates, LLC reserves the right to edit, rewrite, or refuse material.

Sincerely, Abby Melone

Photo Credits: We would like to thank Visit Orlando for their contributions: Cover Page; Pg. 3, 4, 6, 8, 11, 14, 20, 54, 99, 100 Economy: Pg. 18 – The Mayflower

Pg. 38 – Downtown Radius Pg. 46 – ACRE Commercial Real Estate

Real Estate: Pg. 21 – Integra Realty Group Pg. 21, 28 – Lennar Orlando Pg. 22 – Avalon Park Group Pg. 24 – Integra Land Co Pg. 32 – Ustler Development

Transportation & Logistics: Pg. 51, 56 – Lynx Pg. 52 – FINFROCK

Construction & Infrastructure: Pg. 37, 48 – FINFROCK Pg. 37, 50 – Stantec

2 | Invest: Orlando 2020 | CONTENTS

Banking & Finance: Pg. 61 – WAYHOME studio/Shutterstock.com; Pg. 61, 66 – FBC Mortgage LLC Pg. 62, 73 – Seaside Bank Pg. 64 – Addition Financial Pg. 74 – Regions Bank

Healthcare: Pg. 77, 78,83 - AdventHealth Pg. 77, 80, 88 - UCF College of Medicine Pg. 84 – Brasfield & Gorrie Pg. 87 – Osceola Regional Medical Center Education: Pg. 89, 94 – Full Sail University Pg. 90, 93, 96 – Seminole State College Executive Guide: Legal Services: Pg. 109 – MIND AND I/Shutterstock.com Pg. 110, 113, 118 – Rumberger, Kirk, Caldwell

Economy: Before COVID-19, the population and economy of the broader Orlando region were growing. The area had its lowest unemployment rate in years, and was on the path to diversifying an economy that leans heavily on tourism. In a post-pandemic world, these factors should favor a speedy recovery.

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Economy in numbers: Employment by Industry: Industry

April 2020

Total Nonagricultural Employment

Apr. ‘20 - Mar. ‘20 % Change

% of Total

Apr. ‘20 - Apr. ‘19 % Change

1,146,700

100.0%

-13.8%

-13.6%

Professional & Business Services

217,600

19.0%

-6.3%

-8.4%

Leisure & Hospitality

164,500

14.3%

-38.5%

-40.7%

Education & Health Services

145,200

12.7%

-12.9%

-9.3%

Retail Trade

133,300

11.6%

-10.8%

-10.4%

Total Government

-1.5%

128,200

11.2%

-1.8%

Construction

86,000

7.5%

-3.3%

0.7%

Financial Activities

72,600

6.3%

-9.6%

-6.3%

Manufacturing

46,200

4.0%

-8.0%

-5.9%

Transportation, Warehousing, & Utilities

45,900

4.0%

-2.1%

1.8%

Wholesale Trade

45,000

3.9%

-3.2%

-1.3%

Other Services

37,600

3.3%

-15.1%

-16.4%

Information

24,400

2.1%

-5.8%

-5.1%

200

0.0%

-33.3%

-33.3%

Mining & Logging

3.9%

3.3%

2.1%

Professional & Business Services

19.0%

4.0%

Leisure & Hospitality Education & Health

4.0%

Services Retail Trade

6.3%

TOTAL

Labor Market: Employed

Labor Force

1,500,000 1,400,000 1,300,000

Total Government Construction

1,146,700

14.3%

7.5%

Financial Activities

1,200,000 1,100,000

Manufacturing 1,000,000

March 2020 (12-Month Change) Labor Force: 1,366,264 (+15,651) Employed: 1,308,784 (+1,829) Unemployed: 57,480 (+13,822)

900,000

Utilities 800,000

2019

2020

2017

2018

2015

2016

2013

2014

2011

2010

2009

2007

2008

2005

Source: U.S. Department of Labor, Bureau of Labor Statistics, LAUS Seasonally Adjusted

Source: Florida Department of Economic Opportunity,Current Employment Statistics (CES)

Residential Real Estate:

2006

2003

700,000

Information

2004

Other Services

2001

11.6%

Wholesale Trade

2002

12.7%

2000

11.2%

2012

Transportation, Warehousing, &

Consumer Spending: Single-Family

Multi-Family

January 2000 = 100

35,000

225.0

30,000

200.0

25,000

175.0

20,000

150.0

15,000 125.0

Dec 2019 (12-Month Change) 221.1 (+8,4 pp)

10,000 100.0 5,000

Source: U.S. Census Bureau

4 | Invest: Orlando 2020 | ECONOMY

2018

Jan-19

2017

2015

2016

2013

2014

2012

2011

2010

2009

2007

2008

2005

2006

2003

2004

2002

2001

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 YTD

2000

75.0 0

Source: Florida Legislature, Office of Economic & Demographic Research

Visitor Industry: Domestic

2019 Passengers (YOY Change) Domestic: 43.5 M (5.7%) International: 7.2 M (8.4%) TOTAL: 50.6 M (6.1%)

International

55 50 45

millions

40 35

5.8

5.6 2.3

2.7

2.2

2.1

31.9

32.5

34.2

33.0

2005

2006

2007

2008

3.5

3.2

3.0

30

3.8

5.1

4.3

3.9

25 20

7.2

6.6

15

30.7

31.6

31.9

31.5

30.8

31.4

2009

2010

2011

2012

2013

2014

33.7

36.3

37.7

2016

2017

41.1

43.5

10 5 2015

2018

2019

Source: Greater Orlando Aviation Authority

Fortune 1000 Companies Headquartered in Central Florida:

Business Owner Characteristics: Percent Share (2016)

Company

996

407

479

894

193,000

Retail

Darden Restaurant, Inc.

178,729

Food Service

17,000 39,200

Hospitality

Tupperware Brands Corporation

12,000

Retail

Marriot Vacations Worldwide Corporation

11,000

14.4% Percent Share (2016)

Number of minority owned firms with paid employees

23.5%

Number of nonminority owned firms with paid employees

66.8%

Business Type: Ownership Type

Aerospace & Defense

Wyndham Destinations, Inc.

21.5%

Number of equally male --/female owned firms with paid employees Minority Owners

Industry

Publix Super Markets, Inc.

Harris Corporation

56.7%

Number of female owned firms with paid employees

88

396

Total Headcount

Company

Number of male owned firms with paid employees

Hospitality

Number of Businesses

Percent Share (2016)

Total

344,756

100.00%

Private

327,580

95.00%

Nonprofit

9,530

2.70%

Public Sector

1,895

0.50%

43

0.01%

Public

Sources: Florida Department of Economic Opportunity Current Employment Statistics Sept. 2019, U.S. Census Bureau 2016 Annual Survey of Entrepreneurs, Dun & Bradstreet 2019, YourEconomy.org 2019, Gazzel.AI 2019

Unemployment Rate in Orange County, FL: 17.5

15.0

percent

12.5

10.0

7.5

5.0

2.5

0.0 1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

Source: Florida Department of Economic Opportunity,Current Employment Statistics (CES)

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Speedy recovery?: Diversification could be the key to a quick rebound once the specter of COVID-19 passes Population and capital inflows, whether from retired Americans looking to spend their golden years on warmer weather, young professionals enticed by a lack of income tax, or foreign investors looking to cash in on a booming economy bolstered by the safety and stability of the United States’ framework for foreign direct investment, kept the Central Florida economy growing at an accelerated rate in 2019 and indeed, for most of the last decade. When examining the factors that generally contribute to a region’s economic prospects, it is reasonable to conclude that Central Florida, and Orlando in particular, have the potential for sustained economic growth.

In the short term, the travel restrictions and the general quarantine imposed on individuals and nonessential businesses in an effort to mitigate the spread of COVID-19 is expected to disrupt national, state and local economies for the duration of 2020, and even well into 2021. Orlando could be particularly impacted by the economic fallout of COVID-19, as its natural scenery and world-renowned theme parks make it a destination for national and international travelers, linking its economy inextricably with its tourism industry.

6 | Invest: Orlando 2020 | ECONOMY

However, there is more to Orlando than just tourism, including robust healthcare, tech and retail sectors, and international trade, with many signs of growth and opportunity apparent over the course of the past year. On top of that, once the COVID-19 pandemic abates and the lockdown and travel restrictions end, the tourists will no doubt be back, too.

Location and history The Orlando region actually consists of three cities: Orlando, Kissimmee, and Sanford. Orlando itself is the seat of Orange County. Nicknamed “the City Beautiful,” which was the winnning entry in a 1908 contest to replace “The Phenomenal City,” it is the fourth-largest city in Florida, and the state’s singlelargest inland city. Other counties situated in the Orlando-Kissimmee-Sanford Metro Area include Seminole, Volusia, Brevard, Osceola, Polk and Lake counties. From October to May, the weather in Orlando typically ranges from the low 70s to the mid80s, with nighttime lows from the low 50s to the mid60s. Summertime temperatures trend warmer, with highs in the upper 80s to mid-90s. This beautiful weather makes Orlando extremely popular ( )

ECONOMY INTERVIEW

Innovation Tourism will always be a key to Orange County’s economy but the goal is also to make it the world’s ‘center of innovation’

Jerry Demings Mayor – Orange County What are some business opportunities unique to Orange County?

My vision is for Orange County to become the center of innovation for the universe. We have made impressive strides in this regard. A critical factor to achieving this goal is investments in our highly specialized modeling, simulation and training (MS&T) industry. Orange County is a leader in MS&T with partnerships including the University of Central Florida Institute for Simulation and Training, Full Sail University’s bachelor’s degree program in simulation and visualization and Embry Riddle Aeronautical University’s simulation, science, games and animation program. On an annual basis, $6 billion in MS&T contracts flow through the region – many commissioned for the Army, Air Force and Navy simulation command centers stationed in Orlando. Secondly, Orange County is the No. 1 tourist destination in the United States, with 75 million visitors in 2018, and it has the secondlargest convention center in North America. Coupled together, this makes Orange County a unique and attractive meeting and convention space.

What are your strategies for attracting businesses and residents to Orange County?

To continue attracting strong growth, the county must be perceived as a place that is socially, culturally and business friendly. Our strategy focuses on executing plans that ensure quality housing, education, healthcare, arts, jobs and public safety remain high priorities for the region. I am committed to working across the state and region to position Orange County as the “Experimental Prototype Community of Tomorrow.”

Besides COVID-19, what are the biggest challenges facing economic development in Orange County?

We have a challenge in managing growth, housing affordability and developing a multimodal mass transit system that would reduce traffic congestion and more efficiently move people throughout the region.

We are challenged with a lack of dedicated funding to expand and improve the county’s transportation system, including infrastructure, commuter rail, bus transit and the integration of transit technology across the region. To address these challenges, one of my primary goals is to advance a sales tax initiative on the general election ballot in November 2020 that would fund a transformative transportation system.

Additionally, we will look to leverage public-private partnerships such as the Virgin Trains commuter rail project that will connect Miami and Orlando and eventually Tampa. www.capitalanalyticsassociates.com

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ECONOMY OVERVIEW

Orlando attracted a record 75 million visitors in 2018 ( ) with vacationers and snowbirds, with a record 75 million visitors in 2018, according to the latest figures available, and has helped to foster thriving tourism and hospitality industries. Conference-goers also flock to Orlando, as evidenced by the Orange County Convention Center’s status as the second-largest in the country. The city’s status as a tourist mecca also helps to make Orlando International Airport the 13th busiest in the United States and the 29th busiest in the world. The climate has also facilitated the cultivation of a robust network of citrus growers around the city, and oranges are a major Orlando export.

As is characteristic of many large Sun Belt cities, Orlando experienced rapid and considerable growth beginning in the 1980s that continued into the 2000s and up through today. An important facet of Orlando’s growth during this period is its establishment as an amusement park capital, home to both the Walt Disney World Resort (opened in 1971) and the Universal Orlando Resort (opened in 1990). These parks are by far Orlando’s two most popular attractions, but other tourist draws lie along International Drive, such as the Wheel at ICON Park Orlando. Another draw to Orlando is the University of Central Florida, which is one of the largest universities in the United States in terms of total enrollment.

Landscape The Orlando-Kissimmee-Sanford Metro-politan Area is home to 2.6 million people, with a median age of 37.3 years, slightly below the country’s 38.5, and a median household income of $58,610, according to data from statistics website Data USA. A report by WalletHub ranked Orlando 28th out of 515 urban areas around the country in terms of population growth in 2019, and expectations of continued expansion were high last year. “The metro area ranks third in the Southeast for its five-year projected growth at 10.1 percent, according to international real estate consulting 8 | Invest: Orlando 2020 | ECONOMY

In 2018, Orlando was the No. 1 travel destination in the United States.

services firm CBRE Research’s 2019 Southeast U.S. Real Estate Market Outlook. Orlando is also second in the Southeast for international migration at about 22,200 people,” a report by the Orlando Sentinel said. “We’re anticipating having almost 2 million people in Orange County by 2030. I think that speaks volumes, and we’re preparing for that population growth,” Andrew Cole, president and CEO of the East Orlando Chamber of Commerce, told Invest:. “Our transportation infrastructure is being enhanced, Virgin Trains is making its way into Orlando, the Orlando International Airport is building a new terminal, and our local governments are looking at additional transportation solutions and housing affordability issues. Businesses are expanding, creating new jobs, such as Universal Studios’ new Epic Universe theme park and, Disney’s continued growth of their parks,

ECONOMY OVERVIEW

and the Creative Village in Downtown Orlando is an innovation district for high-tech, digital media and creative companies providing new opportunities.

Tourists and visitor numbers continue to increase, providing plenty of opportunities for businesses to thrive. It’s exciting to know that businesses that are here and those relocating here have opportunities to grow and expand their footprint here in Orlando.”

In addition to its impressive population growth, the Orlando metro area was setting the pace for job creation, pre-COVID-19. Orlando outpaced Florida as a whole in terms of employment, holding a 2.5% unemployment rate in December 2019, below Florida’s 2.9% and the nation’s 3.5%, with most new jobs created in the high-paying Professional and Business Services category ($67,340 annual mean salary), followed by Leisure and Entertainment ($26,440) and Manufacturing ($34,180). By March 2020, the unemployment rate for Orlando had climbed to 4.2% due to the pandemic’s impact. That was still below the state (4.3%) and the national rate (4.4%), and will likely improve as the pandemic passes and the economy regains its previous steam.

Overall, Orlando led the State of Florida in year-overyear job creation in 2019, with 36,700 new positions, according to a report in BizJournals. Alongside the explosive growth of the above sectors, there are also some major, established markets that remain Orlando’s top employers. The city’s leading employment sources are its medical and social assistance industry (12.4% of the total 1.27 million-person workforce), followed by retail (12%) and the hospitality and food industry (10.1%).

It is important to note that, while it is certainly promising that the December 2019 unemployment ( )

ECONOMY INTERVIEW

Transformation Diversity, inclusion and equality are the pillars pushing Orlando’s success

Buddy Dyer Mayor – City of Orlando It continues to be a developing area, along with the biomedical and life sciences industry cluster.

A lot of people have recently moved to Orlando; we are able to attract them, and that is part of our economic development strategy. Whether it’s building an arena or a performing arts center, we aim not just for the quality of life experience for our residents but also to attract businesses and the young talent pool that wants to be in a city that values culture, arts, professional sports and those types of things.

Prior to COVID-19, what were some successful strategies for bringing economic growth to Orlando?

We are truly transforming our city. Everything we do is based on diversity, inclusion and equality, and that is one of the reasons we think we are poised to be extremely successful. We are well underway with construction of our Creative Village, a live, work, learn cluster in our Downtown. In Orlando, we are noted for industry clusters, so this is an industry cluster in digital media that will have the academic, residential and, certainly, retail and business parts all clustered together. We also have the most robust modeling simulation and training cluster in the world, and that’s something not many people know. That is successful because of the great research park that we have associated with UCF and military applications.

10 | Invest: Orlando 2020 | ECONOMY

How will initiatives to enhance the city’s economic development benefit local residents?

All the things that we do to enhance our economic development strategy also plays well for our residents.

We are creating a more walkable environment Downtown and citywide, and that is enhancing the quality of life for our citizens. There is also an initiative to have a park within a 10-minute walk of every resident in the city of Orlando. We are mindful of both aspects of that, but I see them interacting very well together because most of the things that we are doing on economic development also enhances the quality of life for our residents.

How important a role have local businesses played in helping to contain the spread of the COVID-19 virus?

We know there are few, if any, businesses that have been immune to the impacts of this global pandemic.

Whether closing completely, limiting operations or having employees work remotely, our employers and entrepreneurs have helped us control the spread of this virus and now we can begin to reopen our economy responsibly. Our local businesses provide a livelihood for our residents and are at the heart of everything we do as a community and so we want to do what we can to support them on the path to recovery.

ECONOMY OVERVIEW

Orlando led the state of Florida in year-over-year job creation in 2019 with 36,700 new positions.

( ) rate for Florida was the lowest on record since March 2006, some experts worry that the city’s economy has relied too heavily on entry-level hospitality jobs as a result of the city’s unrivaled tourism numbers, putting Orlando’s workforce at a disadvantage when compared to workers elsewhere in the United States: while average U.S. workers’ wages grew by 18% over the last 17 years, the wages of Orlando’s workers increased by 5% during the same period.

There can be no doubt that Orlando’s economy depends greatly on its tourism appeal. The theme park mecca is the most-visited city in the United States: of the record 75 million visitors in 2018, more than 68 million were domestic travelers attracted to Orlando attractions such as Disney World, Universal Studios and SeaWorld. These travelers are direct drivers of Orlando’s tourism and hospitality industries, but they also indirectly support related businesses like retail stores and restaurants.

Despite the short-term effects of the COVID-19 pandemic on Orlando’s economy, the city and surrounding region are still primed for growth.

Orlando’s incredible climate, gorgeous beaches, and wealth of tourist attractions will still be there after the virus fades, as will the tax incentives and booming

job market. Moreover, efforts had already been underway to diversify Orlando’s economy well before the outbreak of COVID-19, and these initiatives have already started to bear fruit. An extensive December 2019 study of Florida’s economy by the University of Central Florida (UCF), the second-largest university in the country, identified the Orlando-Kissimmee-Sanford Metro Area’s Professional & Business Services segment as the likely regional growth leader between 2020 and 2022, with an expected average annual growth of 7.2%.

Construction and Mining came in second, at 3.5% average annual growth, followed by Leisure (2.7%) and Education and Health Services (2.1%).

That report also highlighted significant efforts throughout 2019 in the finance sector, with financial services company CardWorks Servicing LLC launching a facility in Orlando that added approximately 500 jobs supporting its customer service, fraudulent activity avoidance and collections services. There has also been a good deal of growth generated within Orlando’s highly skilled manufacturing workforce in the defense contracts submarket thanks to the production of Lockheed Martin’s state-of-the-art F-35 fighter jet, among others. “In total, the F-35 program has contributed $1.7 billion in work for the metropolitan www.capitalanalyticsassociates.com

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Betsy Gardner Eckbert President & CEO Winter Park Chamber of Commerce

How is the chamber targeting international visitors?

The Winter Park Chamber of Commerce has started several efforts to target and reach international guests.

The second biggest group of visitors that we receive in Winter Park is international. Half of the international visitors we received two years ago were coming from the United Kingdom. To respond to that demand, we put together our Tourism Task Force, which created a business plan through destination marketing efforts, and as a result we had a 560 percent increase in traffic to our website from people from the U.K., and we increased by 86 percent the traffic of people from the U.K. through the door of our Welcome Center. We will continue to expand our reach to international guests from different countries as well, including Canada and Brazil.

What are the main challenges your members face?

One of the challenges for our members is attracting and retaining the appropriate talent. To provide them support, we launched a pilot program to identify talented professionals – mostly women with impressive degrees who have stayed home to raise a family. Our program helps them present back to the workplace and assists them in finding work again.

Through this pilot return-to-work program, we placed 83 percent of the participating women within six months in local and global companies. We are very excited to have the ability to furnish our members with a talent base of people who are reliable and have the skills and talents they are looking for.

We implemented a new membership structure to accurately leverage the power and strength of Winter Park as a single destination. To achieve that effect, we removed our merchant’s membership and created a single membership that allows people to see all of our significant regions and understand the offerings of the city.

12 | Invest: Orlando 2020 | ECONOMY

area,” the study stated. It added: “The Orlando– Kissimmee–Sanford Metropolitan Statistical Area is expected to show varying strengths and weaknesses in the economic indicators relative to the other MSAs studied. Personal income growth is expected to average 6.0 percent each year, the second highest of all studied MSAs. Real per capita income levels should average $42,500. Average annual wage growth is expected to be 3.7 percent, the lowest of the studied areas. Average annual wage levels should be at $56,600. Population growth is expected to be an average of 2.1 percent, the second-highest of the studied MSAs.” How COVID-19 impacts these expected results remains uncertain.

The Orlando Economic Partnership, which coordinates the city’s economic growth efforts, highlights Aerospace and Defense, Advanced Manufacturing, Innovative Technologies, such as fintech and digital media, Life Sciences and Healthcare, Logistics and Distribution and Headquarters and Regional Offices as the six keys for developing the regional economy. UCF, it says, is the country’s main supplier of talent for the aerospace and defense industries. To this end, Lockheed Martin finished a 255,000-square-foot research facility in the city in 2019.

Although potentially affected by the COVID-19 pandemic in the short term, the city’s burgeoning medical industry is also a main destination for people looking for the best medical care in the country. The nonprofit AdventHealth, among others, has been increasing its presence in the city’s deregulated medical industry with standalone ERs designed to reduce crowding at hospitals, while Johnson & Johnson completed its Human Performance Institute, designed to provide solutions for workforce problems such as burnout, in March 2019.

Another nonprofit, Orlando Health, highlighted the city as an increasingly attractive domestic medical travel destination, citing the availability of innovative procedures, among other factors, in a story that appeared on its content hub, titled “Domestic Medical Tourism Has more Patients Flocking to Florida for Treatment: Traditionally, medical tourism referred to patients who traveled to Mexico or overseas for treatment. Most did so to save money, but increasingly, more Americans are traveling within the United States for medical care, and specialized procedures like vascular lymph node transfer surgery are fueling this burgeoning business.”

Orlando is also home to many cutting-edge biomedical tech companies, such as Aviana Molecular Technologies, which is working on a portable, Bluetooth-enabled infectious disease sensor. The

ECONOMY OVERVIEW

Steve Leary Mayor – City of Winter Park

We are trying to upgrade the city’s assets as part of our strategic plan. One major project is our new library and events center, which is being designed by Sir David Adjaye, arguably the No. 1 architect in the world right now. It will replace the current library and civic center. We also upgraded our public golf course to make it a nationwide Top 5 nine-hole golf course, we just finished upgrading our high-school football facility, and also put in a collegiate-style track and an artificial field, and we are doing a lot of work on our roadways to increase safety as well as move traffic to the city. We are among the fastest-growing areas in central Florida, so moving traffic through our city safely is incredibly important.

region has also become a hub for automation and simulation technology in areas ranging from medical training to autonomous vehicles, thanks to the creative and competitive environment created by the presence of technology and defense companies, as well as proximity to the legendary Cape Canaveral spaceport.

For example, Luminar Technologies is advancing research related to laser ranging and lidar technology to increase the safety of autonomous vehicles. It is capitalizing on the city’s community of defense contractors, technical research universities and NASA, among others. “It’s like the Silicon Valley of lidar,” Scott Faris, the company’s chief business officer, was quoted as saying by the Orlando Economic Partnership.

Global factors Orlando and the state of Florida also are significant players within the global economy. As such, it is important to monitor events that send ripples throughout the global economy and, thus, impact economic performance locally. For example, economists have been warning of the likelihood of another recession since well before the COVID-19 pandemic, with the U.S. economy slipping from 3.1% growth at the beginning of 2019 to 2.1% by the end of the year. As the national economy slows, it is inevitable that state and local economies will be dragged along.

In Orlando, given its heavy reliance on tourism, a recession will mean that people have less cash on hand for vacations, leading to a potential reduction in tourism spending even after COVID-19 has abated. The hope is that this economic impact can be mitigated by the continued diversification of Orlando’s economy.

Lockheed Martin completed a 255,000-square-foot research facility in Orlando in 2019 A closely related global event is Brexit, the United Kingdom’s withdrawal from the European Union that officially went into effect on Jan. 31, 2020. When Brexit went live, there was a marked drop in the value of the British pound, making it considerably more expensive for UK citizens to travel abroad. This may have a real impact on the economy of Florida and Orlando, given that approximately 1.7 million UK tourists visited the state every year leading up to Brexit, making Britain the second-highest source of foreign visitors annually, behind Canada. In addition to the direct gains enjoyed by local businesses as a result of these annual visitors, state and local governments also enjoyed considerable tax yields. Now, these windfalls will almost certainly be reduced. Beyond tourism, trade with the UK will also likely be impacted by Brexit, as a weaker pound could discourage imports from Florida due to the increased expense, thereby reducing the volume of Florida’s export business with the U.K. www.capitalanalyticsassociates.com

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Erin Brown Partner Brown Immigration Law

What are your areas of strongest demand in the Orlando region?

We are a full-service immigration firm, providing legal services for all aspects of immigration: employment, investment, family and removal. Orlando is our fourth and most recent location. We project rapid growth here, and we expect to expand our team of attorneys by the end of 2020.

We are seeing high demand for a variety of immigration services, particularly employment-based.

That is a good sign that companies are hiring, which increases the need for legal assistance in navigating the visa process for employment-based cases. We always have demand for family-based services and removal.

The official nickname of the city of Orlando is “The City Beautiful.”

How does your firm work with the smaller business community?

Our firm is a great complement to midsized companies that do not have their own in-house immigration team.

Many of our clients are small to midsize companies, although we do have Fortune 500 clients that are growing, and are not able to find the talent they need and are considering bringing individuals from outside of the country. We see a lot of demand in IT and computer science occupations.

What regulatory or policy measures are you watching?

There are numerous immigration policy changes taking place across the nation. The most recent is in regard to public charge, in that anyone who applies for a residency or green card is going to have to prove that they are not likely to be a public charge to the United States. That requires an in-depth inquiry into the person’s financial background and opportunity to earn.

As long as the economy continues to grow, we will see foreign nationals coming to the United States to start their own business or to work for an existing company.

14 | Invest: Orlando 2020 | ECONOMY

Finally, COVID-19 ground businesses all over the world to a halt in the first half of 2020, Orlando included. The city’s robust tourism sector was hit particularly hard, and local businesses are feeling the pinch. By early June, some states had started to test limited reopenings of their economies, such as neighboring Georgia, and if there is not a marked spike of new cases, other states will likely follow suit.

However, the final outcome of the pandemic and associated lockdown on the federal, state and local economies remains an unknown that will be closely monitored.

Public sector initiatives Orlando’s city government is dedicated to cultivating new businesses in the region, as well as facilitating the growth of existing area businesses, because the more successful businesses there are in Orlando, the more the city and its residents benefit. For instance, the city helps its residents realize their entrepreneurial dreams by offering a slew of incentive programs, such as the Orlando Main Street Program. It is also home to a nationally renowned entrepreneur incubator. Small

ECONOMY OVERVIEW

businesses also receive a boost through the Permitting Express initiative, which simplifies and expedites the permitting process so they can start doing business and reach their customers sooner. Finally, the city government has made itself much easier for businesses to work with by enabling all services regularly provided at city hall to be accessed on Orlando.gov anytime and on any device. This proved to be a particularly beneficial move in light of the COVID-19 outbreak and subsequent lockdown.

Orlando’s government and business community also work together to bolster the region’s economy by virtue of the Orlando Economic Partnership (OEP). The OEP is a public-private partnership with the goal of economic and community development throughout Orlando. The nonprofit OEP offers a comprehensive range of business development services to companies that are interested in either moving to, or expanding in, Orlando. These services include confidential project management assistance, which focuses on selecting the ideal business location within the region; site selection assistance, which helps businesses further narrow their location down

to a specific site; market data analysis, covering topics such as area demographics, labor market status/labor availability, public transportation network, taxes, cost of living, and more; networking, including introductions to key players in Orlando’s governmental, academic and business communities; financial and entrepreneurial resources for those who are interested, including grants, Industrial Development Revenue Bonds, and even helping companies become competitive in the region; workforce recruitment and training, to ensure that the local workforce is educated with the skills and knowledge that businesses need them to have, and then connecting these qualified workers with employers through CareerSource Central Florida and other staffing agencies operating in the area. All of these services help to keep Orlando’s economy moving and growing by enticing a constant influx of new business into the region, while ensuring that existing companies are able to grow.

Finally, the federal government has helped to energize the Orlando economy through the Opportunity Zones program that was introduced as part of the 2017 Tax Cuts and Jobs Act. The Opportunity Zones incentivize investment in economically disadvantaged areas ( ) www.capitalanalyticsassociates.com

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oundtable:

Business attraction Local economic development leaders discuss their key focus areas for bolstering their communities and their efforts to attract new industries.

Antranette Forbes

Economic Development Manager City of St. Cloud

What is your main focus in terms of development?

We are focused on having mixed-use developments and encouraging more commercial activity. Developments like the Downtown Revitalization Project on New York Ave. are creating a more walkable space for our residents and visitors. The majority of the businesses in St. Cloud are small or midsized that provide eclectic services, and when people visit our city they are surprised by the mix of businesses here. Transportation is another area we are looking at. We have over 35,000 cars that transit through the city daily, but not all of those go through Downtown. Part of the revitalization project is looking at attracting transit through our city and not just around the perimeter.

Tracy Garcia

Director Elevate Lake Economic Development

What segments are you looking to expand or attract?

We are focusing on diversifying our retail footprint. We are looking to attract experiential and entertainment retail. We have places to shop and eat, and now we are focusing on providing options to play. We also need more diversity in our industrial sector.

What opportunities does Lake County offer?

Lake County has four strategic corridors that have been identified for major economic development purposes.

One is called Wellness Way. In this corridor, we will be fostering healthy living: nutrition, sports medicine athletics, performance training, life sciences, tourism and other targeted uses. Second, the Minneola Interchange is a cardinal spot that provides direct access to Florida’s Turnpike. It makes getting to Downtown Orlando quick and accessible. There are more than 8,000 housing units and multiple mixed-used projects planned in that area. Third is the Christopher C. Ford Commerce Park. It comprises a number of major manufacturers and distribution facilities and is the largest industrial park in Lake County. We foresee this specific location becoming a major economic driver for the county going forward. Last, but definitely not least, is the Wolf Branch Innovation District. It will be anchored by a mixed-use employment center for education, innovation, R&D and high-technology-related industry clusters within a creative village atmosphere.

What strategies will help you diversify?

We are implementing numerous strategies to diversify our economy. We have over 1,300 registered businesses in St. Cloud. Over 35 percent of those are home-based businesses. These “mom and pop” types of companies are a major focus for us. We are looking to move them out of their homes and into office or storefront space.

By helping them to reach that next level, these are the businesses that will be hiring more employees and supporting our growth.

What challenges do you face?

Lake County has a long-standing rural feeling to it that only recently started evolving. It is noticeable in its limited building inventory and its extensive greenfield and greenspace available to build, although a portion of this space is still in need of the required infrastructure for utilities. We are working diligently to obtain the specific infrastructure needed, as evidenced by the planned transportation projects underway in the Wellness Way area.

16 | Invest: Orlando 2020 | ECONOMY

ECONOMY ROUNDTABLE

Belinda Ortiz Kirkegard

Economic Development Director City of Kissimmee

Tom Tomerlin

Former Director of Economic Development & Strategic Initiatives City of Maitland

What are the key industries for Kissimmee’s economy?

Aviation is a growing industry in Kissimmee, as the city owns a general aviation airport: Kissimmee Gateway Airport. This airport is predominately the airport of choice for corporate jets or private plane owners. Kissimmee Gateway Airport is also a reliever airport for Orlando International (OIA), providing services for noncompatible OIA uses. Additionally, understanding the value of the aviation sector’s high-wage jobs, the city launched its Aerospace Advancement Initiative to attract companies to our airport.

The city of Kissimmee is also home to two strong growing hospitals: AdventHeath-Kissimmee and Osceola Regional Medical Center. Combined these hospitals have invested over $300 million in campus expansions or growing their service lines. To capitalize on that growth, the city launched its Kissimmee Medical Arts District, providing economic development incentives specifically to attract more physicians and medical companies to the area.

What industries or companies are you targeting as potential businesses for Maitland?

Our “Big Four” in terms of number of jobs are professional services, finance and insurance, the information sector and healthcare, which in our case mainly relates to healthcare administration more than actual patient care, but it still accounts for 11.3% of employment. The FIRE (financial, insurance and real estate) sector is about 14% of employment, and information technologies is over 9%. With those four sectors you are covering a big share of the total jobs in the city. We’ve had setbacks, such as the decision by gaming studio Electronic Arts to relocate to the city of Orlando. We hate to lose such a great neighbor but the truth is that they are relocating within the metro area so we are not really losing them, they are just moving down the street. But here is the good news: The office space that they will vacate is not going to be difficult to fill. It is really top-notch and their move is still a couple of years away.

What are your strategies for maintaining a balance between growth and the interests of residents?

Meeting the needs of our residents is always at the forefront of economic development. Programs are designed to attract companies that provide high value, high wage jobs to the community. As our economic development program has evolved, so have the job opportunities, and that helps advance our household income levels. Additionally, the evolution of the program has worked toward diversifying our economy by no longer being solely tourism-centric, with jobs circling retail and hospitality.

What challenges is the city likely to face related to growth?

One challenge is the relationship between housing and jobs. Over half of our housing stock is in some kind of multifamily format now, of which 45% is apartments, which are rentals, and 15% is condos. An ability to have housing stock that can absorb jobs growth is important.

The median household income for Maitland is $73,000 a year, which is probably at the top of the list in metro Orlando. We have high income and good paying jobs, so we should have the ability to capture those workers within the city of Maitland. www.capitalanalyticsassociates.com

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Jason Brodeur President & CEO Seminole County Regional Chamber of Commerce

What were some highlights for the chamber in 2019?

We have grown to some of the largest levels of membership, revenue and number of events that we have had in the last 10 years. The economy has helped accelerate a lot of participation by businesses in the area. As that happens, we are able to provide more opportunities for networking and business development, and it results in the acceleration of growth in the economy.

( ) around the country through capital gains tax deferment the longer an investor remains involved in the project, and after 10 years they can exit the project and reap the return on their investment completely tax-free. There are 12 such zones in Orlando, and an investment fund was launched in late 2019 to help put them to productive use. The fund, called the Orlando Opportunity Fund, will prioritize investment in real estate development projects and early-stage businesses throughout the Opportunity Zones in Orlando and others in central Florida. The fund, which has already generated some capital, plans to have $20 million raised by the end of 2020 or the middle of 2021.

The startup capital provided by the fund will be crucial to helping local businesses and development projects get off the ground within the Opportunity Zones, which will be the first step toward the revitalization of these beleaguered areas and the addition of jobs to the local market. The fund is particularly interested in providing capital to tech startups.

As COVID-19 continued to grip the nation, with most

What are some unique business opportunities in Seminole County?

It all starts for us with our Top 5 ranking in education.

Our K-12 system is exceptional compared to other counties in a state that was just ranked fourth in educational outcomes. We have one of the biggest public universities in the world in our backyard: the University of Central Florida. Complementing all of that is Seminole State College, which is nationally ranked as one of the best state colleges. Business opportunity starts with talent development. We are able to attract, retain and grow a great number of businesses because of our workforce development, and that is what makes us unique. It is reasonable that someone can grow up in Seminole County, go to public school, get a world-class university education and get a high-paying technical job, all without leaving the county.

What impact do events like the Seminole Business Expo have on the county?

Events like this expo show the business community how much diversity there is in Seminole County.

Twenty years ago, we were the bedroom community to Orlando, and the more people come and set up businesses here, the more surprised they are about our diversity of commerce. We have several industries here, including technology and robotics. This event helps people understand that they can find what they need for their business here in the county.

18 | Invest: Orlando 2020 | ECONOMY

Prior to COVID-19, Orlando was one of the fastest-growing cities in Florida, both from a population standpoint and economically.

ECONOMY OVERVIEW

people sheltering in place in Orlando and traffic greatly reduced throughout the region and others in Florida, Gov. Ron DeSantis said that the lockdown and slowdown of tourism could prove a “golden time” to move ahead with much needed and delayed infrastructure projects throughout the state; among them, the completion of the long expected I-4 Ultimate. “I think now is a golden time if we’re going to be, kind of in a down state for the next 2-4 weeks, or whatever – however long the guidelines go for – that is the perfect time to really accelerate on some of these busy roads,” DeSantis said in a news conference. “There’s not going to be any traffic jams, so we’re going to identify some projects and hopefully be able to make a big difference,” he was quoted as saying by ClickOrlando.

DeSantis ordered the state’s Department of Transportation to accelerate work on a $2.1 billion list of infrastructure projects, including the I-4, which connects the state’s Gulf of Mexico coast with the Atlantic Ocean. Orlando has been working on around $10 billion worth of infrastructure projects since at

least 2018, including the I-4 Ultimate; the $3.5 billion Brightline (now Virgin Trains USA) express train connecting Orlando to Miami; a $3.5 billion renovation and expansion including a new intermodal facility to connect trains with the Orlando International Airport; the $1.6 billion creation of the Wekiva Parkway, expected to complete Orlando’s beltway system; and the $650 million expansion at Port Canaveral, one of the state’s busiest tourism ports.

The governor was not alone in seeing the COVID-19 lockdown as a good opportunity to complete infrastructure improvement projects. Virgin Trains has continued construction of its 168-mile high-speed train from South Florida to Orlando, the company’s Vice President of Rail Infrastructure Michael Cegelis told Fox35. The project, expected to be completed by December 2022, is even benefiting from the slowdown of other sectors, as more workers have become available as a result of furloughs and the long distances and linear nature of the work make maintaining social distancing and work safety regulations easier than in industries like building construction.

Moving ahead with these sorts of projects could prepare the region for a faster economic recovery once local residents are again comfortable going outside and patronizing local businesses, and once vacationers again start taking advantage of Orlando’s many attractions.

Universal Orlando, in fact, began a phased reopening in early June, and Disney World is set to reopen in July.

In the meantime, infrastructure projects like I-4 can keep Orlando’s economy afloat by providing thousands of jobs to workers laid off by their usual employers. It could also shine a light on how to keep working toward a healthier, more diversified economy once the specter of COVID-19 passes.

Looking ahead Orlando is known for its stunning attractions and gorgeous weather, so it’s no surprise that its tourism sector has long been its economic backbone. However, these are not the only reasons that record numbers of visitors and permanent residents continue to flock to Orlando, thanks to concerted efforts by the local public and private sectors to diversify the metro area’s economy. For example, the local government has worked tirelessly to establish a business-friendly legislative and regulatory framework that dovetails with Florida’s state-level tax incentives, making it easy to start, and continue, a business in Orlando. Additionally, various government and public-private initiatives have worked to attract tech startups and establish a vibrant and still growing life sciences sector. As the region www.capitalanalyticsassociates.com

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ECONOMY OVERVIEW

The city of Orlando has over 100 parks and 21 community centers.

grows so do the prospects for business. “We’ve seen auxiliary services that are booming right now because our highlights and milestones primarily due to the of their exposure to the healthcare industry. I have growth of Orlando as a whole. We call it a crawling to a seen a lot of companies relocating to the Orlando area, walking stage. We were a small to midsized market, but including in technology, healthcare, manufacturing we’ve seen a lot of growth in corporate headquarters and a lot of the bigger industries. Because it is quite a coming into town. We’ve seen transient community, especially quite a few companies IPOing, given the hospitality industry, which has added huge value in it is easier to find talent here. A this market. We’ve also seen a lot lot of people are also willing to of private equity groups coming relocate to Florida, whereas they into the area. That has been a may not be as willing to relocate huge success for us because to Michigan, for example.” that’s where our specialty lies as Of course, there are challenges an executive search firm,” said to overcome, including COVID-19.

Vivian González-Padilla, market The closure of non-essential leader at StevenDouglas, in a 2019 businesses and various travel interview with Invest:. Among restrictions have heavily impacted the sectors expected to fuel Orlando’s industries and the longMelissa Mitchell, growth is healthcare, which will term economic ramifications Ascendo Resources also provide a knock-on effect are unknown. This is in addition for other segments, according to Melissa Mitchell, to a general slowdown in the national and global managing director of Ascendo Resources. “Healthcare economies before COVID-19, which will certainly is one of the fastest-growing sectors in the Orlando impact Orlando as a hub of international trade and market. We do recruitment for clinical and nonclinical, travel. The expectation, though, is that the recent which is not just healthcare in hospitals but also back- push toward more economic diversity will position office and data services related to healthcare. There are Orlando for a speedy economic recovery, followed by a lot of data companies, finance companies and other a continuation of rapid growth.

(People) are also willing to relocate to Florida, whereas they may not be as willing to relocate to Michigan.

20 | Invest: Orlando 2020 | ECONOMY

Real Estate: The ‘Theme Park Capital of the World’ is an established household name for leisure visitors. As the Orlando region undertakes full efforts to diversify its economy from a heavy reliance on tourism, real estate is playing a major role in its growth ambitions.

www.capitalanalyticsassociates.com

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Growth ambitions: Despite the added layer of complexity from COVID-19, Orlando is confident it can maintain its real estate boom With a growing population, overall strong economy and a persistent low-interest rate environment, Orlando’s real estate market has gone from strength to strength in recent years. It is considered a hot rental market, which in turn, supports housing investment. Of course, as the “Theme Park Capital of the World,” it relies heavily on tourism, a fact that may hamper, but not stop, efforts to rebound from the COVID-19 pandemic.

According to data from the U.S. Census Bureau, the Orlando-Kissimmee-Sanford Metro Area population grew 20.5% from 2018 to 2019, adding 60,000 residents.

This growth rate places the Orlando metro area 10th in metro area growth from 2010 to 2018. Moreover, Norada Real Estate’s analysis of Orlando’s real estate market reports that the city’s population has grown an average 7.2% per year since 2017, a first for the city.

With a total population of 1.96 million in 2020, Orlando remains an attractive option for businesses, students, young professionals and families alike.

The Orlando MSA Statistics published by The Orlando Economic Partnership reports that the city employed a labor force of 1.35 million professionals in 2018. Business insurance firm AdvisorSmith’s Cities with the Best Job Growth (2019) report ranks Orlando 22 | Invest: Orlando 2020 | REAL ESTATE

in third place nationwide within the category of large cities (meaning a population larger than 500,000 inhabitants), although leisure and hospitality take up the lion’s share of the labor force at 20%.

Interest rates for mortgages, meanwhile, have fallen to historic lows, pushed even further downward by the pandemic’s outbreak. In the last week of April, U.S. mortgage rates plummeted to record lows, according to Freddie Mac, with the 30-year fixed-rate average sitting at 3.23%, down from 4.14% a year before. That alone should help underpin the market, as it had before the pandemic. “The market has been strong with interest rates dropping. We are growing our market share with builders throughout the country. We have two lines of business: retail and third-party origination, and August 2019 was the busiest month that we had in our retail mortgage origination. Business has been strong, especially because of the low interest rates that are stimulating buyers and refinance activity,” said CEO Rob Nunziata of FBC Mortgage, LLC. The Orlando Regional Realtor Association’s Housing Market Narrative stated that the 7,023 homes available for purchase in December 2019 amounted to a 10.8% decrease in inventory compared to December 2018 ( )

REAL ESTATE INTERVIEW

Senior housing Central Florida’s first new CCRC in 30 years aims to reduces healthcare costs and assure healthcare

Amy Alvarado-Plank Director of Sales and Marketing – Legacy Pointe at UCF What is the construction status and projected impact of Legacy Pointe at UCF? Legacy Pointe at UCF broke ground in late 2019, and we are looking to complete the entire campus by mid-2021.

This $172-million financing project will serve over 400 individuals in the Central Florida area. We help reduce the cost for future healthcare and assure healthcare, memory care, rehab or assisted living, should they need it, by people they know in a safe environment.

That is unique, it’s underserved in the Orlando market and Legacy Pointe at UCF is the first continuing care retirement community (CCRC) to be built here in the last 30 years. Even more exciting, Legacy Pointe is the first university-based CCRC to be built in Central Florida with a true collegiate affiliation.

How has demand for senior housing developed in the Orlando region over the last year?

The demand for senior housing in the region is significant. Healthcare is expensive and many people don’t have the resources to access it. What we hear most is that our prospects have not planned for long-term care and with the product we offer at Legacy Pointe, we can provide our residents with an active lifestyle and the security of healthcare. Our program protects their assets all while offering a high refundability to their heirs should they so choose.

We look at the number of age- and income-qualified households, and the rates in Orlando are far lower than they are in many other places with suburban, attractive areas. Here, we have more customers than we have products.

What are the benefits of your affiliation with UCF? The benefits have to do primarily with UCF’s various schools being able to provide our community with diverse programming that will provide a benefit to

the total person, body, mind and spirit. UCF will be part of our assurance quality-improvement program.

The other component has to do with students. We see nurses, physicians, hospitality managers, future business leaders and students in these areas have an opportunity to do internships at Legacy Pointe. Our residents really embrace that dynamic.

What are some trends for senior living communities within the Central Florida region?

The trend we are seeing is much more individual service, rather than large, group activities. People want options, they seek to stay engaged and active.

We conduct research to explore our residents’ preferences and then build programs tailored around their needs. www.capitalanalyticsassociates.com

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Steven McCraney President & CEO McCraney Property Company

What has made Orlando a favorable destination for industrial real estate?

The Orlando economy is attracting new residents, it’s generating new jobs and the increased interest is driving industrial users into the market because of the ability to distribute out of the state of Florida from the region on a one-day basis. We relocated to Orlando because the area places us right in the middle of the state.

We operate throughout the Southeast and Orlando, which anchors us in the middle of everywhere that we need to be. It also provides the ability to move easily throughout the Southeast because of the region’s dynamic airport.

In what segments are you seeing the greatest growth?

We are industrial developers. That is our mainstay and focus. This is complemented by third-party property management. As of late, the growth has clearly been the warehouse and distribution space. The total industrial space in Orlando is 123 million square feet, which breaks down into roughly 100 million square feet of warehouse distribution, 13 million square feet of manufacturing and the remainder is made up of office, flex space and distribution product. Here’s what we know: warehouse is the new retail. If a person is ordering online, whether it’s products, clothing or food, the merchandise is likely not coming from a store, it is almost certainly coming from a warehouse.

This is attributed to e-commerce growth and fulfilled by third-party logistics. Over the next few years, we are going to see the markets continuing to change and expand. From an industry perspective, I believe we have a trajectory that is at least 15 years long. While the product may continue to change, that product is coming from somewhere and that somewhere is a warehouse. As social distancing becomes ever more important, it is clear that suppliers, like Amazon, are still delivering essentials through package products to each and every home.

24 | Invest: Orlando 2020 | REAL ESTATE

Migration from high-tax states has pushed Orlando’s residential real estate to record growth.

( ) and a 7.3% decrease compared to November 2019.

At the same time, single-family home availability dropped 12.2% and 9.2% for condos. Combining available inventory and sales pace, Orlando offered a 3.3-month supply of housing units in December 2019.

On the home resale front, Norada Real Estate showed 2,597 units available in April 2020, representing a 15% decrease compared to April 2019. Moreover, even as online real estate database company Zillow ranked Orlando among the Top 5 markets for first-time buyers, its Orlando Home Prices & Values Index reports a jump in median home price value from January 2012 to January 2020, amounting to $123,000 and $258,000 respectively.

COVID-19 impact The virus outbreak was more than a pause button across the different links of the global economic value chain. For the real estate market, how deep and long the impact from the pandemic will be across the different fronts of the industry remains uncertain. Focusing on Orlando and looking at the virus’ impact in the short term, the City Beautiful remains reliant on its tourism

REAL ESTATE OVERVIEW

Gary Gagnon President & CEO – Gagnon Development

Orlando’s real estate sector is stronger than most, since it is somewhat in a protective bubble because of being mostly tourism-driven, though we are actively trying to attract more techrelated businesses. Our unique location and economy protects us whenever there is a slowdown or recession. With low interest rates and prices increasing for commercial and residential real estate, fear is beginning to spread and people are starting to question if it is time to sell. Luckily, if the whole country takes a hit, I think Orlando is somewhat protected and should not be as harmed as much as the rest of the country would be.

and hospitality industries, which is bound to cause an added layer of damage from rampant unemployment.

In April 2020, ATTOM Data Solutions released a special report that revealed COVID-19’s economic impact would be most severe in the housing markets of 10 of Florida’s 67 counties, most of which are located in North and Central Florida, such as Osceola, Lake, Flagler, Clay and Hernando. The study attributes Central Florida’s low median income and 4Q19 foreclosure rates as the primary source for concern.

In parallel, the wave of unemployment claims rose to staggering levels in the wake of the pandemic. The state of Florida reported more than 505,137 first-time claims in the week to April 18, 2020, as per data from the U.S. Department of Labor. The number placed the Sunshine State at the top of the largest increase of claims nationwide. To craft a strong response to the outbreak, a 44-member Orange County Economic Recovery Task Force held its first meeting on April 22 to discuss the details of a phased economic reopening, based on the level of client interactions inherent to local businesses. The county was cleared by the state in late May to start a broader reopening of its businesses.

One factor that has kept the sector moving during the pandemic has been the availability of technology, with real estate agents increasingly resorting to streamlined video tours and realtor-generated 3D photo tours. Many had already started to implement these tools so the change was not as marked as it was for other industries. Toll Brothers, for example, has an established online presence, like many of its competitors, because that is where the home search now begins. “Prospective home buyers are searching online for information before even visiting our sales

COVID-19’s impact could be hardest on counties in North and Central Florida

centers,” said Brock Fanning, division president of Toll Brothers and speaking to Invest: prior to the virus’ spread. “As a result, our marketing efforts are strategically designed to reach buyers when, where and how they wish to receive information – whether digital or in print. In addition to showcasing interactive site plans and abundant home and community images, our website offers virtual, 360-degree home tours, which allow buyers to walk through the model homes online to get a better feel for them.” The pandemic could speed up the adoption of these tools and more for both realtors and customers.

Moreover, industry experts agree that this downturn should not be compared with the 2007-08 financial crisis and recession as mortgage standards have been reinforced since then, annual home appreciation rates remained at an average 5% from 2014 to 2019 compared to the erratic variations between 6.5% and 12.5% ( ) www.capitalanalyticsassociates.com

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oundtable:

Commercial focus The commercial real estate segment, including retail, is a key component of the Orlando market. Industry leaders spoke with Invest: about the challenges in the sector and the emerging trends that are shaping the market.

Tracy King

President Compass Real Estate Management, Inc.

What challenges do you face in the commercial segment of the market?

One issue we are seeing in commercial, and in residential, comes down to our relationship with insurance companies. They are getting extremely demanding with inspections. It has gotten to the point where they are performing annual inspections and requiring improvements to carry policies. It is a huge change. While most of the demands are fair, it may not be so in the eyes of smaller investors, as they can increase commercial property expenses significantly.

Another difficult issue is the difference in property rules among municipalities. All of them operate with different systems as well, such as permitting. The gaps between each can be significant, and the same can be said about code violations. For example, the Orange County code violation system is difficult to use, it almost seems anachronistic. Orlando’s system, by contrast, is intuitive and easy to use. Consistency across municipalities would be highly beneficial for commercial and residential developments, especially for companies like us that have several properties in several counties and municipalities and each one operates differently What is your outlook for the commercial market for 2020 and beyond?

While the long-term impact of the COVID-19 outbreak remains to be seen, I believe that even if it creates a difficult economic situation for either the United States or the world, the bounceback will be much faster for Orlando. There is a significant amount of pent-up demand waiting to be released.

26 | Invest: Orlando 2020 | REAL ESTATE

Patrick Mahoney

Principal, President & CEO NAI Realvest

What challenges have you identified in Orlando’s commercial real estate market?

The most difficult problem we are running into is inventory. We constantly focus on adding properties to the list because they move quickly. We have run out of land on the northeast side, between Orlando and the St. Johns River. Going north, Amazon was just greenlit a 1.4-million-square-foot distribution center in Daytona.

We anticipate lots of industrial development in the northern and southern regions as a result. From the brokering side of the business, our focus is on working with property owners whose properties are either not listed or are not being listed properly, and helping them to get the proper approvals to change their land uses if necessary so they are getting optimal use of that land.

There is a significant portion of ranch land, for example, that is not traditionally approved for large residential developments, industrial developments or mixed use.

How has real estate demand evolved in Orlando?

The changes in retail are the talk of the town. We work with Planet Fitness among several other retailers that are marketed as destinations. You still see the national value tendency with examples like HomeGoods and T.J.Maxx. Similar businesses are still coming in and leasing space. Forever 21’s bankruptcy filing had more to do with overleverage. It was more about debt rather than retail. There are certain malls, such as Fashion Square Mall, where a complete redo is scheduled. In these cases, the anchor tenants are likely not going to stay, to the benefit of a more multifamily, mixed-used project.

REAL ESTATE ROUNDTABLE

Brad Peterson

Senior Managing Director & Head JLL – Orlando Capital Markets Group

What makes the Orlando a good market to be in?

The exciting thing about being in Orlando is the level of growth that is going on in our market. Investors are drawn to the explosive population and employment growth across all geographical areas of our city. The growth translates into stronger demand by users for space, and higher rental rates, which has also spawned more development activity. There truly is no slow area in the real estate market in Orlando today.

What do you consider are your biggest challenges in the Orlando area?

Hiring and recruiting is one of our biggest challenges in the Orlando area. Because our economy and employment markets are so strong, this challenge expands beyond real estate. It is difficult to hire strong employees because there is a lot of demand for new talent across different sectors.

We are recruiting outside of the metro area and relocating from other markets. Across the country most people are aware of how strong Orlando is, so employees are excited to move to Orlando because they feel the future is very bright here and there are a lot of growth opportunities.

What segments are seeing the most growth?

The most vibrant component of the real estate market in Orlando is the apartment communities. JLL works on the capital markets side of the business, and we are seeing new development activity through our assistance in arranging construction financing for new apartment projects.

Cindy Schooler

Managing Partner & Market Leader – Orlando & Tampa SRS Real Estate Partners

What is unique about the Orlando market?

There is a significant amount of businesses coming to Orlando. We are a test field in the area because of the tourist market. A lot of entrepreneurs bring concepts here and test their brands because of the diversity in the area. That allows clients to test lines that they would never be able to test in traditional retail markets.

How is the retail real estate segment shaping up in the Orlando region?

We are seeing a blend of both online retail presence and brick and mortar, and that is a trend that we will continue to see for the next two to four years. Retail is going through an evolution, and that is not necessarily a negative thing.

We will see significant changes over the next few years.

How has the firm performed in its regions?

We had substantial increased revenue. We have grown the professional brokers team. SRS has traditionally been known as a tenant rep company, but we have broadened our scope of services to embrace a lot of development and redevelopment projects. A lot of our brokers have aligned with development partners as well, and we are continuing to push our reputation in that arena to be a very strong player. We have focused on diversification of our service line to make sure that we are known for our whole portfolio. We are taking on a stronger advisory role to our clients and looking at a longer perspective on the market. A lot of us as practitioners are going to have to change from being transactional brokers to being consultant brokers who give a broader view of what is going on in the market. www.capitalanalyticsassociates.com

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REAL ESTATE OVERVIEW

( ) from 2000 to 2005, and the market is witnessing an inventory shortage compared to the excess availability of 2007.

Market fundamentals Orlando enjoys a variety of fixed variables that have rendered it appealing for relocation, including favorable weather, its theme parks, and residential real estate prices that place it primarily as a buyers’ market. But the city refuses to sit on its laurels and is intent on diversifying its economy. In 2015, a group of entrepreneurs founded VentureScaleUp, a business accelerator managed by SeedFundersOrlando and supported by the city of Orlando’s Technology Community Support Program. It helps businesses outgrow their startup stage through focused workshops, mentorship, strategic advisory and business connections. By 2019, it had assisted 39 startups, raised $7.1 million in seed capital and created 72 jobs. Another honorable mention includes the GuideWell Innovation Center. Founded in 2016 in Orlando’s Lake Nona Medical City, it houses healthcare and medical startups. This sample of diversification efforts have earned Orlando a distinction on Inc. Magazine’s Surge Cities List, placing it fourth in population growth, eighth in job creation and 16th in net business creation, all positive factors for the real estate market. “The influx of people coming to the Orlando region is staggering. The demand for apartments and homes is high, with little supply. As a result, what used to be low-income housing is no longer classified as low income. Property owners charge more because the demand is high and there is no capacity. Home building and construction are doing well because of all the families moving to the region. The office segment, however, has not picked up. The need for office space is changing. Companies and traditional retailers are leasing half of what they used to lease in terms of space. The desired spaces are more efficient, offer better lighting and are closer to transit options. Innovation and technology have changed the demand for office space,” said Stephen LaFreniere, president and CEO of Quest Company.

Orlando’s transportation infrastructure is also undergoing a major facelift. In 2017, the Orlando Economic Partnership announced $15 billion in investments to flex its live-work-play muscle. The revamping effort includes $2.3 billion in I-4 Ultimate, aimed at connecting the Gulf of Mexico to the Atlantic Ocean; $3.5 billion for a Brightline-Virgin Trains USA express train connecting Orlando to Miami; $3.1 billion for the expansion of Orlando International Airport; 28 | Invest: Orlando 2020 | REAL ESTATE

E-commerce and COVID-19-related challenges have left big box retailers and strip malls uncertain about their future.

$1.6 billion for the creation of the Wekiva Parkway to bring Orlando’s beltway system full circle; $650 million for Port Canaveral’s expansion; $800 million directed toward SunRail, the region’s commuter rail system; and $50 million directed at a coast-to-coast bike trail.

Florida’s real estate also remains a favored destination for international investment, despite a national drop in investment attraction. Inbound investment flows for U.S. real estate declined 36% in 2018, as shown by the National Association of Realtors’ 2019 Profile of International Transactions in U.S. Residential Real Estate report. The primary factors behind this drop are slower international economic growth, reinforced capital controls from China, a stronger U.S. dollar and a statewide residential inventory shortage. But despite the overall national retreat, Florida remained a favorite destination. Mashvisor’s 2019 analysis of Orlando’s real estate found that Orlando came in a close second to Miami when it comes to foreign investments in real estate. “Until recently, Orlando and Tampa were both considered secondary markets. Most foreign

CONSTRUCTION REAL ESTATE OVERVIEW

Sandi Bargfrede Managing Partner ACRE Commercial Real Estate

How does your company capitalize on being an allfemale commercial real estate firm?

Women provide a different perspective on retail as we are typically the shoppers and we usually plan the family social activities. We are able to use this to our advantage as we can bring a different point of view to a project.

ACRE did not set out to be an all-female firm. That said, we are all-female-owned but we are always open to hiring exceptional professionals, male or female. My business partner and I have been in this business for 20-plus years each and we have witnessed the industry evolve with more professional women entering the historically male-dominated field now more than ever.

We believe this trend will continue and we will continue to provide the required mentorship platform for all in the business looking to thrive.

investors, and a lot of large institutional capital, would only focus on the Tri-County area if they were looking to invest in Florida. That has changed with the growth dynamics that Orlando and Tampa have been benefiting from, and we are seeing more foreign capital and international investors coming into our markets.

The most active international capital groups in Central Florida are coming from Canada, South America and Asia. The apartment market has evolved significantly over the last three to four years and is now one of the most actively traded markets in the country,� said Scott Ramey, senior managing director of Newmark Knight Frank.

Investing in Orlando’s real estate market remains an attractive option as the Sunshine State is one of the few with no personal income tax. Orlando’s friendly tax environment, coupled with its affordable real estate, makes it the land of opportunity for business startups.

Entrepreneurs and small-business owners can rent showrooms and business space on better terms than most other cities and states.

What business opportunities does Orlando offer to your business?

Over 70 million people per year visit Orlando, bolstering a strong service and hotel industry, where retail spaces are required to provide for these visitors.

The retail opportunities are exponential. We are seeing a significant wave of people moving here, with close to 12% overall job growth in Orlando itself.

With all of this growth, we are seeing a surge in new development from shopping centers to urban mixeduse communities. These new developments provide ACRE the opportunity to use our experience to work with developers before they break ground.

How has COVID-19 altered the market?

We do not believe it will resemble the 2008 crash, especially if we can get back to work sooner than later.

It will definitely change the landscape considering the ever-changing social distancing guidelines and measures. These will certainly have a lasting effect on retail and restaurant margins. However, it will also open the door for reinvention and creativity toward preservation. www.capitalanalyticsassociates.com

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James Zboril President Tavistock Development

What are some of Tavistock’s efforts to foster innovation and sustainability?

We have a responsibility to the environment and to develop thoughtfully. We believe that it’s the right thing to do. We embrace the choice architecture concept, where the architecture design presents different choices and influences decisions. For example, if there is a lobby with a set of stairs and the elevators aren’t visible, people are more likely to take the stairs because they’re right there and it’s convenient. Things like that foster more activity and healthy living, and that is part of the design differential that we look at in addition to sustainability from an environmental impact standpoint.

In 2019, we announced plans for a new linear park in Lake Nona. It’s a unique project that will feature a waterway designed to serve as an alternative for stormwater management. Surrounding the waterway, the park is planned to feature multiple trails, pocket parks, and spaces for activity that will stretch along a half-mile path from our Town Center to our Laureate Park neighborhood.

How is Tavistock shaping Orlando’s construction sector through its Lake Nona development?

In Lake Nona, we’re always looking for ways to try something new, to do something better. When we think about what’s next, we start first with creating the environment. At our core, we build places, we build physical spaces, but the magic is when they’re activated with people and programming. So, we think about what is the magic factor? How are people going to use and enjoy this space? And how can we make their experience memorable? That thought process has allowed us to lead new and innovative projects from Boxi Park, Orlando’s first shipping container venue, to a thriving health and life sciences cluster, and putting the region’s first driverless shuttles on the road in 2019 to give our residents and visitors an easy way to get around the community.

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Residential As 2019 drew to a close, the Orlando Regional Realtor Association reported its members took part in 3,020 sales of all home types in December 2019, a 24.7% increase compared to the 2,422 sales in December 2018 and 11.8% more compared to the 2,701 sales in November 2019. Single-family homes continue to be the primary buyer preference as sales for this specific type of housing reached 2,401 units in December 2019, a 27.7% rise compared to December 2018. In comparison, condo sales amounted to 294 units, a 2.3% year-on-year decrease. Finally, foreclosures and short sales accounted for 103 units, a 10.8% increase compared to the 93 distressed sales in December 2018.

As per Mashvisor’s Orlando Real Estate Market Report for 2019, single-family homes reached a median price of $382,800, well above the overall median property price of $344,100. Moreover, Orlando’s housing market is flexible enough to provide a wide array of options for investors interested in single-family homes, including a range of prices, as well as bedroom and bathroom numbers. Condos reached a median price of $227,400, making them an attractive option for first-time buyers.

CBRE’s 2019 Southeast U.S. Real Estate Market Outlook report on Orlando’s multifamily segment showed net absorption reached a post-recession high for this specific home type, with rental rates climbing over the $1,200 mark. Vacancy dropped to a record 6%, with developers overwhelmed with demand.

Case in point: 2017 and 2018 both saw a multifamily units delivery of more than 8,000. The City Beautiful’s multifamily segment demonstrates a healthy attraction, having raked in an average annual investment of $2.4 billion. Should the upward tick in both population and job creation remain constant, it is a certainty that multifamily developments will remain in high demand.

Meanwhile, Zillow states that Orlando’s housing

Orlando’s multifamily segment attracted $2.4 billion in investment in 2018

REAL ESTATE OVERVIEW

Melissa Marcolini-Quinn SVP Managing Director – NorthMarq Capital

As it turns out, we had made a large investment in the ability to work remotely as a disaster preparedness measure just before all this. We signed the contract just a few weeks prior to the pandemic breaking out. As a result, we were able to get on the forefront of that. Our contractor received an enormous number of inquiries after this hit, and they were telling people that it would be over six weeks before they got everybody up and running, while we were able to just transition right over. It was really fortuitous.

market may soon be facing a “Silver Tsunami.” As per its findings, more than 25 percent of the United States’ owner-occupied homes will be on the market over the next 20 years as boomers pass on, translating into potential excess housing. Orlando, Miami and Tampa are expected to be the most impacted cities as they share traits common to large retirement hubs. The U.S. Census Bureau’s latest data shows that close to 35% of the Orlando housing market is owner-occupied, while 10 percent of its population is 65 and older. “Florida is a top-tier retirement destination in the country; we have a great tax and business climate for people who want to retire or otherwise relocate here. Additionally, our expanding business environment will bring thousands of new residents to Florida. These are key drivers for success because often seniors come to live near their adult children to receive assisted living and memory care,” said Trey Vick, CEO of V 3 Capital Group.

Rentals From a national standpoint, Norada Real Estate found that the market for single-family rental homes has risen up to 30% since 2017. Orlando obeys the national norm as the city presents a large demand for rental properties with 46% of its population renting, even when Orlando’s real estate purchase prices have an affordable median value of $250,000 as of February 2020. The city’s strong economy allows Orlando’s rental market to continue to boom. As job opportunities continue to grow from its diversification efforts, people from every corner of the country and the world are choosing to relocate to the City Beautiful.

Based on data from Zillow updated in March 2020, the median rent price in Orlando is $1,648 per month, on par with the $1,649 median monthly rents in the

Orlando-Kissimmee-Sanford Metropolitan Area but higher than the national median monthly rent of $1,588. According to RentCafé, only 11% of Orlando’s housing units rent for less than $1,000/month; 54% rent from $1,001 to $1,500/month and 28% rent for between $1,501 and $2,000/month. “Over the last five or six years, the customer base has trended away from homeownership. There is a lot of hangover from the recession, where foreclosure was prominent. Now, the main demographics – the empty nesters and the millennials – like a little more mobility and rental properties allow them to do that. During the recession, the homeownership rate went up to around 69% and normally it’s at 63%. A lot of the demand we see is that 6% who are now renting rather than buying, and this drives our business,” said David McDaniel, principal at Integra Land Company.

On the affordability side of the equation, areas such as Mercy Drive, Rosemont North and the Seaboard industrial area stand out with rents averaging $985 per month, whereas Downtown Orlando, Lawsona/ Fern Creek and Baldwin Park are on the expensive side, with rents ranging between $1,722 and $1,827 per month. “Based on national metrics, rent growth in the multifamily segment may cool off over the next year, primarily on the Class-A group of properties. Rent growth in the workforce housing looks like it will remain robust.

That is because a lot of product is being renovated. This gives us market rent growth plus the premium for the renovations, which have a potential overall rent growth of 5-6%,” said Joe Springsteen, vice president of Pinnacle Property Management Services, LLC, speaking to Invest prior to the pandemic’s outbreak.

The March 2019 edition of the National Low Income Housing Coalition’s The Gap: A Shortage of Affordable www.capitalanalyticsassociates.com

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REAL ESTATE OVERVIEW

As more individuals move into the region, the need for multifamily and mixed-use developments has never been higher.

Homes lists the Orlando-Kissimmee-Sanford area as worst among the 50 largest metropolitan areas in the United States relating to affordable housing. Expressed in figures, Orlando only provides 13 available and affordable rental homes for every 100 extremely lowincome renters. Moreover, in April 2019, mortgage lender Freddie Mac ranked the area fifth among the 20 most rent-burdened metropolitan statistical areas, meaning its inhabitants spend more than 30 percent of their income on either rent or mortgage alone, to the detriment of first-necessity goods spending. The challenge of providing more affordable housing inventory is sizable as the constant inflow of new inhabitants puts upward pressure on rental rates, despite Real Data’s reported $3.6 billion worth of new Central Florida apartments in the pipeline. In parallel, density restrictions in certain areas prevent developers from surpassing a certain number of units in specific parcels of land, coupled with the added complexity of a prevalent construction labor shortage, rising developable land costs and increasing construction material pricing.

Growing neighborhoods Orlando’s housing inventory dip has not prevented the growth of burgeoning neighborhoods across the 32 | Invest: Orlando 2020 | REAL ESTATE

city, specifically those with average median selling prices below the $250,000 price tag, such as Orlo Vista, Deltona, Reunion, Celebration, Golden Oak, Leesburg, Union Park, Poinciana, Kissimmee and Pine Hills.

These are the most sought-after options, especially for first-time buyers.

A historical neighborhood for AfricanAmericans located in west-central Orlando, is garnering significant attention as recent real estate developments are sparking gentrification fears among the population. Parramore is on the radar for the Major League of Soccer (MLS) as it has chosen it as the home for its Orlando City Stadium, parallel to Amway Arena. On the education front, the area will host the new Creative Village and two new campuses for UFC Downton and Valencia College. It is undeniable that the neighborhood is at the cusp of a deep revitalization but with that comes displacement concern. In response, a local charity together with community loan programs launched the Parramore Asset Stabilization Fund, with the objective of purchasing and renovating housing assets while keeping rents affordable. Moreover, Parramore is but one instance that could generalize throughout Orlando should affordable housing needs remain unanswered across the region. ( )

REAL ESTATE INTERVIEW

Innovation New development has the potential to move the ball forward for Orlando

Craig Ustler President – Ustler Development How will the Creative Village Innovation District in Downtown Orlando act as a catalyst for growth?

The big picture for Creative Village is to develop an Innovation District that is one of multiple industry clusters in Central Florida. This urban master redevelopment comprises 68 acres of mixed-use development with a variety of housing, office, higher education, parks and retail space. We can get industries sitting side by side with academia and tap into the talent pipeline that will be produced there. Companies are going to flock to where the talent is. That is one of the critical pillars we are working on, together with sustainability, transitoriented development, economic diversification and community development, moving the ball forward for Orlando as a whole.

How can Orlando get back on track with its sustainable growth?

The COVID-19 outbreak is not a market-driven recession. Rather, it’s an artificially mandated shutdown. The competitive advantages that several regions held prior to these circumstances will remain and emerge on the back end. Orlando will come out just fine once the pandemic subsides. There were real, fundamental reasons we were doing well prior to it — relatively low living costs, good weather, a busy airport, strong tourism, job growth, a place people want to work, study, live and retire in, to name a few.

The virus will not shake this solid foundation. There are windows of opportunity in terms of economic diversification on several fronts. We are going to see an uptick in the demand for cities that offer an urban lifestyle but are not New York City-dense.

What significant changes do you anticipate COVID-19 will bring to new real estate developments?

The definition of what we came to know as co-working is likely to change. We will start to refer to it more as flexible working. Companies will show increased desirability for the capacity to either increase or decrease their footprint. Companies such as WeWork commoditized such flexibility. Coming out of the pandemic, office building 2.0 is going to be really interesting. There will be a lot more outdoor space, with tenants willing to pay for terraces and other outdoor amenities more so than before. Technology will permeate the health and wellness fronts for office spaces, primarily touch-free access and enhanced ventilation systems. With estimates of 15 to 20 percent unemployment caused by the pandemic, affordability will be the order of the day for multifamily, meaning smaller units, co-living and refurbished units. www.capitalanalyticsassociates.com

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Market voices: Investment Opportunities

John Gay

Managing Principal Cresa

Orlando’s commercial real estate is very tight. It’s a landlord’s market and one of the biggest challenges we have in attracting businesses to the area is the lack of space. Consequently, for larger employers the best bet is to engage a developer for a build-to-suit when considering a relocation from another city.

Existing tenants with growing needs and new tenants have to look sooner for a new space on the market. We are not seeing much speculative development related to office space, but there is quite a bit of speculative development in the industrial space, which is a driver for new companies.

We see more investment in the tertiary market. In Downtown, and in the center of Orlando, the real estate cost is higher and we are seeing expansions to the suburbs. We have seen markets strengthen over the last four years. Some of the Downtown areas that are called districts have taken off. For example, the Milk District wasn’t really known by name five years ago, and the Hourglass District didn’t exist by name two years ago. Those districts are hotbeds for investment right now because of their proximity to the major inner city and Downtown development.

Charles Mitchell

Chief Executive Officer & Owner First Capital Property Group

Michael Krause

Partner Atrium Management

In terms of demand, multifamily and industrial are in the lead. There are ups and downs because of issues with big box retail and malls, but retail is still strong because we have strong residential developments and retail follows those.

We’ve also seen statistics that show we aren’t building enough rental homes for people coming into Orlando. The figures show about 1,100 people a week coming to Orlando. And it’s not just retirees but also working folks as well. Add to that the University of Central Florida and the pool of talent that we have, and it is just a great combination.

Probably the area that has potential soon is the area around Apopka of Central Florida. A lot of that is the result of the Wekiva Parkway and the connectivity that’s occurred. There is ease of access between Apopka and markets such as Maitland and Winter Garden, they’ve got a new hospital there, and there is commercial and residential growth. So, it is already on the radar, but I don’t think it is even close to hitting its stride yet.

Christopher Starkey Senior Managing Director Integra Realty Resources

34 | Invest: Orlando 2020 | REAL ESTATE

REAL ESTATE OVERVIEW

Beat Kahli President & CEO – Avalon Park Group

Orlando has a high level of infrastructure, with the Orlando International Airport, the Orange County Convention Center, University of Central Florida, and a broad job base. The level of infrastructure compared to the pricing on real estate is one of the biggest advantages in the area. If you compare Orlando to other markets like South Florida and New York, Orlando still has land.

While we still have a lot of land available, Orlando has done a great job in diversifying its economy. The I-4 corridor is key to the region’s growth and I see Orlando and Tampa growing together. We have done a much better job since the Great Recession. When I look back on the last decade of recovery, I’m very positive about Central Florida for the next 20 years.

( ) Another area of opportunity can be found in the Opportunity Zone program, which provides tax incentives to investors in low-income communities.

Twelve of the 427 Sunshine State Opportunity Zones are in Orlando. As one example, nonprofit Dr. Phillips Charities announced in May 2019 its plans to develop a $500 million food hall in the Packing District. Such projects are expected to multiply in West Lakes, Parramore and in the vicinity of the Orlando Executive Airport. Chicago-based Cushman & Wakefield published a July 2019 report, “In the Opportunity Zone: Location.

Timing. Capital,” in which the commercial real estate services firm evaluated the economic momentum of 45 office and multifamily markets with 2,700 of the roughly 8,700 zones nationwide. Six Florida metros placed in the Top 25, four of which reached the Top 10.

Orlando was No. 1.

Commercial The last year witnessed a heightened pace of industrial development delivery, with 3.4 million square feet and 4.1 million still in the pipeline, as per Avison Young’s Year-End 2019/Orlando Industrial Market snapshot. The report also showcases a 2019 investment of close to $334 million between December 2018 and December 2019, 116.4 million square feet of total industrial inventory in Orlando, an overall vacancy of 7.82% and 195,373 square feet of direct year-to-date absorption reported in 4Q19.

Going further, CBRE reported Orlando’s industrial space has received an annual $400 million since 2014. As Central Florida’s land availability becomes

Orlando placed No. 1 in a Cushman & Wakefield report analyzing the economic momentum of Opportunity Zones scarce, an increased interest in nearby areas, such as Daytona Beach, is expected.

The thriving office space was fueled by Orlando’s job creation capacity, with 36,700 new private jobs created from November 2018 to November 2019, as per the Florida Department of Economic Opportunity.

The honorable mention of the year goes to KPMG, which concluded construction in 4Q19 of its $450 million, 780,000-square-foot corporate campus, KPMG Lakehouse in Lake Nona. Prior to COVID-19, co-working was poised to consolidate a foothold in Orlando, with CBRE ranking it the fifth-fastest growing flexible office space market in the United States with a total 485,000 square feet in 2Q19, a 59 percent increase of 180,000 square feet compared to 2Q18. Case in point: Novel Coworking LLC is setting up shop in Orlando with the $13.7 million purchase of the www.capitalanalyticsassociates.com

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REAL ESTATE OVERVIEW

centennial Angebilt Building, of which 30,000 square feet will be renovated in an initial phase to turn the 11-story building into an entirely co-working space.

Flexible office space made up 1.2% of Orlando’s total office inventory in 2Q19, compared to only 0.7 percent the 2018 period.

On the retail front, tourism remains a major component that dictates retail space development.

In the event of a tourism downturn, this segment will be the most impacted, as COVID-19 will certainly show. According to Avison Young’s Year-End 2019 Retail report, Downtown Fort Lauderdale, Orlando and Tampa share a common trait in the sense that new retail development is led by mixed-use projects, the lion’s share of which is taken by multifamily developments with an inherent retail component.

CBRE showed that in 2019, net absorption of retail space neared 2.4 million square feet, with less than 1 million square feet in completions, and a vacancy rate of 4 percent. Prior to COVID-19, Greg Morrison, managing director at Avison Young, was optimistic about the segment. “In Orlando, in particular, we are diversifying our customer base and looking for new industries to work in. Keeping up with technology is also important to remain competitive and survive in case of a downturn. When the economy falters, tenants downsize and spaces become vacant, but there’s always opportunity. It does become more challenging but commercial real estate is a sustainable business even in a down market.”

In terms of in-demand regions, Lake Nona and the I-4 Corridor lead the pack, according to John Crossman, CEO of Crossman & Company. “The areas that are

closest to the I-4 corridor have typically done well. As more beltways have been added over the years, that has spurred additional growth. Submarkets like Oviedo, Lake Mary, Clermont and Kissimmee have done well, too, due to their proximity to the corridor’s beltways. I don’t think you can talk about Orlando’s retail without talking about Lake Nona. There’s no doubt that that area has a major significance. Retail activity starts with jobs, then residential and retail, and there are numerous jobs and growth in Lake Nona.”

Looking ahead As the market waits for activity to pick up postCOVID-19, the future shines bright for the Orlando area. The Orange County government has drafted a blueprint for the city toward 2030 with its Comprehensive Plan, which includes a Future Land Use (FLU) map, with regular amendments to accommodate the county’s vision to meet the needs of its inhabitants. Moreover, Orlando’s Economic Partnership 2030 Report estimates Central Florida will consistently add 1,500 people per week for the next 10 years to reach 5.2 million residents in Central Florida, close to an extra million from its current 4.3 million. That poses sizable challenges in terms of affordable housing and infrastructure developments to accommodate this influx, but also secures business dynamism across Orlando’s key industries. Moreover, this growth is sure to accommodate sustainability practices as the city was named LEED Gold City in January 2020 due to its sustainability and resilience efforts, launched by Orlando Mayor Buddy Dyer’s 2007 Green Works Orlando initiative.

Construction & Infrastructure: In spite of COVID-19, developers in Orlando are still hungry, with more than $1 billion in projects proposed just in March 2020. While demand may change as a result of the pandemic, construction remains on a strong footing. On the infrastructure side, the region is reaping the rewards off a $15-billion program now in its third year.

www.capitalanalyticsassociates.com

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Hungry: The construction sector was booming prior to the pandemic and all signs suggest the industry remains on a growth footing Pre-coronavirus, Orlando’s construction industry was booming. Although the demands of the industry may change, including a shift toward more industrial development and less office space, the construction industry in Orlando remains on a growth footing.

In fact, according to the city of Orlando, there were 2,426 building permit applications in the first quarter of 2019, and, despite COVID-19-related shutdowns, the pace of applications has not dropped drastically for the same period of 2020, totaling 2,372. Some believe that one of the benefits of the pandemic is that it will allow the construction market to balance out with the labor market after a period of very low unemployment and staff shortages.

Performance Construction is a vital industry for those living in Orlando, accounting for 6.85% of total jobs, up from 5.58% in 2017. Natural resources, construction and maintenance provided 11,400 jobs in Orlando in 2018, with architecture and engineering providing a further 3,000.

In 2019, construction spending in the Orlando area was up 1.6% on the year to a total value of $12.4 billion, 38 | Invest: Orlando 2020 | CONSTRUCTION & INFRASTRUCTURE

with the biggest gains seen in infrastructure, up 13.7%; healthcare, up 6.3%; and manufacturing up 4.1%. IHS Markit expects this trend to continue in the next few years, and by 2022 total construction spending will reach $13.2 billion, up 6.5% on last year’s numbers.

After a lackluster 2019, residential construction is expected to recover in the next few years, along with spending on education construction, while healthcare growth will remain strong.

Frequently, developers pinpoint the lack of human capital, combined with high land costs, long permitting time frames and the rising costs of materials as the main issues hindering the industry.

Land is becoming scarce in popular cities like Orlando, and between 2014 and 2019, Florida’s median price per square foot rose 40.8% from $118.18 to $166.55, higher than the U.S. rate of 31.7%. According to the National Low Income Housing Coalition, Orlando has the worst affordable housing crisis in the United States with just 13 affordable housing units available for every 100 residents in need.

Key projects To combat this, authorities are considering ways (

)

CONSTRUCTION INTERVIEW

Team first Success is built on strong personnel and a sense of culture and community

Tim Dwyer Regional President – Brasfield & Gorrie LLC What factors have contributed to Brasfield & Gorrie Construction’s success?

Definitely our people. The consistency shown top to bottom and the longevity of our team enables us to look back at the last 10 years and forward to the next 10 with the same group of dedicated professionals. We were able to nurture a sense of culture, community and family. In Orlando, we do a lot of self-perform work. We have anywhere from 400 to 500 people in the field, it is so unique to this market and what we do.

We are a true builder in lieu of being a broker.

Which areas are showcasing the strongest demand for your services?

A new area in terms of our footprint is Lake Nona.

We are developing a wellness center there, a codevelopment deal with Tavistock and Signet, as well as a new medical office building. Several of our competitors are doing well in this community. The medical office market continues to grow. We have been building quite a few of those. There are also some major headquarters being developed in Orlando in which we are participating, such as EA Sports’ new building in Downtown and Ustler Group. For the latter, we are also developing an apartment deal in Creative Village. The concept is a great opportunity for us to grow.

How will the COVID-19 outbreak influence the demand for office space?

While working from home is expected to gain increased relevance and preference for some employees, our team feedback is that they miss the engagement, the fellowship and camaraderie created within daily office interactions. We believe demand for office space will prevail.

How has the pandemic impacted your business?

Our company has a long-standing history of tackling problems head on. Even though a pandemic is in a category of its own in terms of problem-solving, we instituted a series of safeguards right off the bat, including with our contractors and clients.

What emerging trends within the industry are gaining relevance?

Prefabrication is gaining more ground. Obtaining young labor for construction work is a prevalent issue and prefabrication, whether applied to bathroom pods or a hotel room, provides a viable solution. It is here to stay and we are on the cutting edge of this trend. In Birmingham, we have built entirely prefabricated hotel rooms, healthcare patient rooms and apartments. It boils down to working smarter, not harder. www.capitalanalyticsassociates.com

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Allen Finfrock CEO FINFROCK

How has the COVID-19 outbreak impacted Orlando’s construction industry?

As a 75-year-old company, we have successfully navigated several recessions and downturns. We have experience positioning ourselves to be ready for whatever comes. There are several unknowns, however: the duration of the disease and its overall economic impact. We will be prepared regardless of the length and depth of the outbreak’s effects.

What emerging trends in the industry are you following?

I am glad to say that our design build process is becoming increasingly accepted. It has been around and talked about for a while, but we have really seen mainstream acceptance of this process in several areas where there used to be resistance. We have shown it not only can really work for most projects but can perform far better than the traditional delivery system. We are excited about witnessing the continued acceptance of design build and offsite, modular construction. Using a manufacturing mentality to assemble buildings is becoming more common as well. Construction is rather behind in the adoption and use of technology compared to other industries. The continuing use of constructiondedicated technology can lend a tremendous amount of value to owners and the real estate development industry moving forward and will continue to do so in the future.

What do you anticipate will be the main highlights of 2020?

Technology is poised to become an ever-increasing portion of our business and our company. We all need to become tech companies to a certain extent to thrive and grow in the future, combining that with design build and different ways to deliver value to our customers. We make it easy for our customers to get the building they want.

40 | Invest: Orlando 2020 | CONSTRUCTION & INFRASTRUCTURE

( ) to incentivize affordable housing projects. In December, Universal Parks and Resorts pledged that it would donate 20 acres of Orange County land for affordable housing. The announcement came the day before the county was asked to give $125 million in tax breaks to the park and, although both events were not explicitly linked, critics complained that it is likely that the donation factored into the county’s decision. The land will be used for a mixed-use highrise with up to 1,000 units.

Another significant project stretching into 2023 is the upgrade of the Orlando Convention Center, adding around 320,000 square feet of meeting and event space. In January, another step forward was taken as PCL Construction Services was chosen to provide the architectural, mechanical, electrical, plumbing, fire protection, civil, survey, low voltage, cost estimator and structural services for the project. Negotiations were ongoing with PCL in April before the contract is finalized. Joint venture Populous + C.T. Hsu already won the design contract for the project.

In February, the Orlando Magic NBA team also selected Balfour Beatty Construction as the general contractor and New York-based HOK as the architect for its planned 100,000-square-foot training and health center project. The city sold a 2.58-acre parking lot close to the Amway Center to the Orlando Magic for $5.1 million. Although construction has not yet begun, the project is set to be completed in 2021.

Another undertaking for the Magic is a $400-million mixed-use development called Orlando Sports and Entertainment District, which will contain office space, retail space, event space, a hotel and an openair plaza.

And Maitland-based gaming firm EA Sports was lured to Orlando’s Downtown through incentives from authorities, who hope to create a gaming cluster in the area. EA will spend $1.5 billion on the Creative Village and will relocate 700 employees by 2021. The city of Orlando approved $9 million in incentives to seal the deal with EA Sports. In nonvirtual sports, Orlando City commissioners selected Barton Malow to carry out a $60 million renovation of Camping World Stadium, modernizing restrooms and concession areas, improving seating and upgrading parking lots.

Financing trends The city of Orlando has taken a proactive approach to attracting investors, creating prospectuses to encourage investment in certain areas. But private financing is also getting involved. The Orlando Opportunity Fund was launched in November

CONSTRUCTION & INFRASTRUCTURE OVERCONSTRUCTION OVERVIEW VIEW

2019, intending to capitalize on the Opportunity Zones to grow startups in the region. The fund, led by experienced real estate and venture capital professionals, has begun its first raise and expects to invest in its first project in 2020.

One problem faced by Orlando is the lack of funding in office space because investors are reluctant to put money into a sector that requires a great deal of preleasing. Capital is, however, pouring into medical office space and mixed-use spaces because of the emphasis on live, work, play. In January, Upshot Capital Investors bought a 2.6-acre plot zoned for hotel and office space in Orlando for $3.8 million. And the proximity to AdventHealth’s Orlando campus could mean that the space may be used for medical offices.

Residential Orlando’s house prices have been steadily rising, with the overall median house prices of Orlando homes sold in January totaling $245,000, up on the year by 7.9%. There were 2,270 sales in January, up 16.4% on the year despite fewer homes available.

Only 7,030 houses were up for sale in Orlando in January, down 14.7% on the year. As of January, there is only a 3.1-month supply of houses, compared with a 4.2-month supply in the same month of 2019. The apartment vacancy rate is just 3.5% and average rent in Central Florida is $1,335.

And there is no lack of supply coming online in 2019 and 2020. In Central Florida, there are 8,000 new apartments now under construction and another $2.3 billion worth, or 12,242 units, proposed. Three of these will be in Osceola County. One is a 420-unit complex consisting of seven buildings engineered

by Harris Civil Engineers while another is a 366unit, 12-building development that includes a pool and clubhouse with architecture work carried out

by ARC3 Architecture. The final development is a seven-story, 163-unit apartment project for shortterm vacation rentals. Orlando-based developer Urbanscape Development plans to build a four-story, 216-unit apartment complex that includes a poolside cabana, a 10,000-square-foot clubhouse and a resortstyle pool.

Osceola County is not the only one to attract the gaze of developers. In February, three new projects sought permits in Orange County, with a combined cost of $211 million and adding almost 1,000 apartments. One is an expansion of SVO Vistana Villages from 400 apartments to 600, another is a 270-unit project on Colonial Drive and another is ( )

Scott Lyons Business Unit Leader – Southeast Region DPR Construction

What are the clearest trends in construction in the Orlando area in recent years?

At DPR, we are very passionate about driving forward the concept of prefabrication in our construction projects. There are multiple reasons for this. There is a shortage of skilled construction workers, so prefabrication decreases the demand for workers onsite and when you prefabricate components they are usually of a higher quality and safer generally, resulting in a better product for the client. For the KPMG project, we prefabricated 800 bathroom pods. We built them in a factory here in Orlando, called SurePods, and the quality was beyond anything we could get building them in place. It changed the dynamic of how the project was executed, resulting in a faster speed-tomarket with fewer people needed on the project.

What other advanced technologies are you employing in your work?

We are believers in technology where we can find a great use for it, and where it adds immediate value.

We beta test a lot of ideas and technology, apps and software, and generally settle quickly on things that help the client or our people. One is laser scanning. We use it before rebuilding a client’s existing space, like a corporate office, to create a digital model that captures the exact reality of the designed space.

We are also working in partnership with Reigl to utilize LiDAR technology and bring some of their technology into the vertical construction market. It is a drone-borne scanning technology that flies over an existing site, scans it and provides the contours of the land, so you can see elevation changes and other useful data. A civil engineer can take that data to minimize how much dirt is moved around, for example. This type of real-world use of technology on our projects keeps us nimble. We are innovating in ways that not only changes the landscape for the construction industry, it’s helping our client successfully expand their products into new markets. www.capitalanalyticsassociates.com

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Market voices: COVID-19

Jason Albu

CEO Albu & Associates

None of our client meetings have shown they are shutting down construction.

They are coming to us to renovate facilities or developing new projects in certain markets. We are looking at increasing revenue and workforce over the next 12 months. There is still a tremendous amount of growth opportunity within the Central Florida market. We believe that COVID-19 will be a slowdown, but not the end of construction like the financial crisis we experienced in 2008.

Prior to the COVID-19 outbreak, contractors and subcontractors were all extremely busy with the number of projects being built in Orlando. It eased competition as there was more work available. Companies were growing as fast as they could add good qualified people. We are optimistic that this trend will continue once the outbreak passes.

We build a lot of schools, so I will be curious to see how much of the online learning will stick, although this is hard to predict. Maybe schools in the future will be smaller and some classes will be held online. Office space arrangements may be revised, especially if staff are maintaining productivity while overhead can be reduced. With COVID-19, we are already seeing the loss of tax revenues so it will be interesting to see which projects will be canceled or delayed. I think we will feel it a year down the road.

If solicitations are any indication, our work will continue because our proposals have not slowed down, both in education and wastewater projects. The private sector has definitely slowed but this also means more people are available.

We have pushed into Texas and Houston and opened up additional offices in Florida, particularly in Brevard County. We also predict some work will open up in the Florida Keys for our company. Orlando has a lot of work, but it remains at a plateau for us, rather than growing significantly.

Chuck Whitall President Unicorp National Developments Inc

Ron Davoli

President & CEO Wharton-Smith

Because our business is based on socialization and lifestyle, the pandemic is a complete disruptor to that. We have taken a large portion of our portfolio and waived the rent for April, May and June 2020. We anticipate come July 2020 that we will be fine again. We were in a position to provide this gesture to our tenants.

We continue to be spot-on with our payments to let our lenders know we have the strength to weather the storm, which also allows you to secure future capital through borrowing transactions. The positive from this is that we have several projects that will start construction throughout 3Q20. Construction prices prior to this were skyrocketing out of control. With the pandemic, construction all over the country is stopped or at the minimum slowed significantly. This event has allowed us to find better price points for construction costs, to the tune of $10 million to $20 million in construction savings.

42 | Invest: Orlando 2020 | CONSTRUCTION & INFRASTRUCTURE

CONSTRUCTION OVERVIEW

( ) a 240-unit apartment complex at Ocoee Apopka Road. And 46 acres in Brevard County was bought for $2 million in February by Cocoa Grand, which intends to spend $50.9 million to build a complex with one-, two- and three-bedroom apartments with clubhouse, car wash and more amenities.

Commercial While retail continues to decline not only in Orlando but all over the United States, there are still more stores opening than closing, according to Coresight Research.

At the beginning of 2020, big-name stores such as Macy’s, American Eagle, Bose and Lucky’s all announced the closure of Orlando stores but there is still room for them in a different format: experiential retail. The mixed-use format has been flourishing in the United States for several years and now it’s full steam ahead as developers come up with more, newer and innovative additions to their developments than ever before.

Heritage Distilling announced plans to open a 62,000-square-foot space named Heritage Square that will feature a distillery, an events space, a tasting room, shops and restaurants. And Orlandobased Bynx signed a lease in February to invest over half a million dollars in Downtown Orlando to install a coffee shop meets vinyl records store meets bookstore meets recording studio. With 7% vacancy rates in Downtown Orlando – slightly higher than the Orlando average of 5.5% – store owners are now looking to make their mark in a part of town that is expected to see its population jump by almost 10% in the next 50 years.

The hotel industry is also getting in on the mixeduse theme. In December, it was rumored that Grand

Cypress Resorts may be bringing a new 500-room, fivestar Hilton Hotel to Orlando – one of only seven in the United States. Owner Dart Interests confirmed on its website that the resort was being redesigned at a cost of $350 million for the first phase. It is set to include not only a new hotel but also an aquatic facility and residential units, along with shops and restaurants.

Perhaps the biggest growth in the commercial segment will be seen in the industrial space, as a result of the coronavirus pandemic. As home delivery becomes increasingly popular, it is becoming more essential for developers to snap up land that is close enough to city centers to facilitate logistics but also far enough so that land costs are not prohibitive.

Two such developments planned for 2020 are Dalfen Industrial’s 243-acre project between ICF and Lake Nona, and Goya Foods’ 330,000-square-foot distribution center in the Mid-Florida Logistics Park in Apopka. Dalfen plans to build 2.8 million square feet of industrial properties on the site, estimated to cost $182 million, while Goya’s center will cost an estimated $42.9 million. Goya also has an option to expand out by another 330,000 square feet.

Looking ahead In spite of COVID-19, developers in Orlando still are hungry for land. In the first week of March alone, more than $1 billion in new projects were proposed, including the Universal warehouse in Apopka and the theme park’s second phase of Volcano Bay. The first phase of the City Center West Orange is still set to be completed in 2022 and Unicorp National remains in talks to buy Christian theme park The Holy Land to redevelop into a mixed-use project.

®

oundtable:

Building success Regional construction and home-building leaders discuss their successes, areas of growth and the latest trends in their segments.

Bruce Adams

Vice President & Florida Division Manager Robins & Morton

Jeff Condello

President & CEO RANDALL Construction

Where are you seeing the most growth?

In 2019, we had our largest revenue year in the history of our 20 years in the Orlando market. We focus on healthcare construction. Certificate of need laws that govern healthcare construction in the state of Florida have been recently relaxed. This has opened up the space for numerous potential hospital projects. The next four to five years look bright in terms of demand for our services in the state. Florida is a top retirement destination and although advances in healthcare, science and technology are driving a lot of demand for outpatient facilities, with the aging population that continues to move to the state, there is still a need for more inpatient space. As a result, we are seeing a continued demand for new hospital campuses as well as new out-patient facilities throughout the state.

What are the company’s latest expansion efforts?

A big product for us is precast elevator shafts. We make the elevator shafts at RANDALL, ship them and install them in three days. This process traditionally takes three to four weeks, and we do it significantly faster, with much less labor on site and fewer safety concerns for our clients. We are also developing our own floor and wall system. We’re going to build our own buildings, integrate the elevator shafts and provide and install modular bathrooms and kitchens.

When we do a building, we’ll use around 30% of the manpower that is usually needed on site. Given the manpower shortage, the entire industry is trying to figure out the modular, prefab, precast segment to save on labor and scheduling. I believe we are ahead of the curve on this.

How are the labor shortage and rising construction costs affecting the work you do?

We have seen that challenge, but for the most part we can manage our way through the labor shortage. The escalation of construction costs year over year in the healthcare market today is about 5-6%, with the finite resources available and subcontractors that have the expertise to build in healthcare. That is a significant amount of escalation, when talking about $100-million or $200-million projects. Working with owners to procure projects as early as possible so that escalation risk moves from the owner side to our side is an added value for our clients. Another way that we overcome the labor shortage is through our company’s commitment to our employees’ career and personal development.

How are you facing the labor shortage in the construction sector?

We’re launching an education program through the Orange County Public Schools system. Students will attend a half day of school at RANDALL and receive on the job training and education at our site in the second half of the day.

We recognized that part of the issue we are having with labor nationwide is that students have been told they need to get a four-year degree, but many never use it. We offer good construction jobs that require certificates and a shorter training period. We are trying to become champions for changing the model in schools and inform about opportunities in the construction sector.

44 | Invest: Orlando 2020 | CONSTRUCTION & INFRASTUCTURE

CONSTRUCTION ROUNDTABLE

Suresh Gupta

Owner Park Square Homes

What factors are driving the company’s success?

First, we are a small enough company that we can be nimble and offer a fast turnaround. Second, we have had long-term relationships with a lot of landowners and brokers and they know that when we decide to buy it, we will go to contract without contingencies, unlike with large developers. We are well-known within the area and have a solid reputation.

What trends you are keeping a close eye on in the real estate sector?

One of the trends we saw was that people were looking to buy more affordable homes due to wage growth being misaligned with housing prices. We are planning to start a division that will focus on monthly payments for first-time homebuyers, providing them with an outline of what they will be expected to pay on a monthly basis.

What do you see for your own company looking to the future and for real estate in Orlando?

We have to take each day as it comes and create our own opportunities. In the long term, the government will inject $2.3 trillion into the economy and that will eventually trickle down into consumers’ pockets.

This means that when the economy does recover, it will come back very strongly. The competitive edge is always a long-term outlook because the cost of entry to this market is very high and permitting time frames are lengthy. We do not anticipate any emerging competition taking advantage of the situation for the time being.

David Lewis

Executive Vice President CORE Construction

What are some of the major successes you have experienced in the last 12 months?

A variety of K-12 projects combined with work on the Orlando Convention Center would be the highlights for our business. We are starting a $52-million middle school project for Volusia County in 2020. We have some multifamily projects and senior living facilities in the area.

On the convention center project, we have carried out re-roof projects on upward of 1.5 million square feet, including vaulted roofs. We have carried out curtain wall retrofits and replacements and we are now working on renovations to about 60 meeting rooms.

How has virtual construction been a benefit to your operations in Orlando?

This is one of the areas in which we differentiate ourselves. Virtual construction ranges from being able to create a 4D schedule, a virtual tour of the building based on the architect’s plans and virtual mockups assembling any component of the building in a detailed video before building. This technology can be used from pre-construction to completion and facilitates a smoother construction process. On the promotional side, owners can use those materials for those promotions, whether private or public.

What is your outlook for the next year?

It will get really tight. A lot of the K-12 capital expenditure is driven by sales tax initiatives so while last year many districts collected higher than expected revenues due to a strong economy, those revenues will now be considerably lower. www.capitalanalyticsassociates.com

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Good investment: A multibillion-dollar infrastructure program launched in 2017 appears to be paying dividends Orlando is the most-visited destination in the United States and, as such, its infrastructure must be up to scratch. In terms of connectivity, there are 8.5 million people within the same distance of the region, it has three major ports within a two-hour drive and it has seven international airports within 100 miles. In terms of utilities, the area sits atop one of Florida’s largest aquifers, 100% of fiber optic systems are redundant and the city of Orlando has made a pledge to run on 100% renewable energy by 2030. By all measures, Orlando’s infrastructure is reaping the rewards of a $15-billion infrastructure program launched in 2017.

Investments outlined in the program include $2.3 billion in the I-4 Ultimate to connect the Gulf of Mexico to the Atlantic Ocean, the $3.5 billion BrightlineVirgin Trains USA expansion, a $3.1 billion expansion of Orlando International Airport and the $1.6 billion creation of the Wekiva Parkway to complete Orlando’s beltway. To attract private investment, the city also outlined initiatives such as Creative Village, a $1 billion home for professionals and students in the $207 million UCF and Valencia College Downtown campus. All of this and more played into Orlando 46 | Invest: Orlando 2020 | CONSTRUCTION & INFRASTRUCTURE

being voted one of the Top 10 American Cities of the Future by FDI Magazine at that time.

Ecosystem and climate change Orlando is blessed with a variety of ecosystems, ranging from wetlands to suburban forests and pastures. The city and region’s urban trees are estimated to remove around 60% of oxone in one year – or approximately 11.9 grams of air pollution per square meter of tree cover. All this means that the region must find ways to integrate nature into its urban design while also allowing its natural habitats to flourish.

One of the ways that Orlando authorities are promoting responsible use of resources and protection of the natural environment is through a bigger focus on green building and pursuit of LEED certifications.

In February, Orange County was one of 20 U.S. cities and counties chosen to participate in the 2020 LEED for Cities and Communities Grant Program. Through the LEED program, the U.S. Green Building Council (USGBC9) provides governments with a framework for addressing energy, water, waste, pollution and carbon, taking into account social and economic ( )

INFRASTRUCTURE INTERVIEW

Engineering tips How Universal Engineering Science views the region’s infrastructure needs and its main challenges

Mark Israel President & CEO – Universal Engineering Sciences What are the biggest infrastructure developments needed in Orlando to accommodate the growing population?

There are two big projects under construction that will significantly improve the region’s infrastructure needs. One of these projects is the I-4 construction, which will provide a major improvement to the region’s transportation issues. We are providing quality-control inspections for the contractor on the project.

The other big project is the Orlando International Airport expansion, which will provide a huge advantage for the region and the airport. On the airport project, we’re doing threshold inspection, which is a statutory requirement in Florida to inspect every structural element of the building. In the private sector, we have the Virgin Trains expansion project for the Orlando and Central Florida region.

What unique challenges for engineers and construction managers do you face in Orlando?

In our industry, a lot of our workforce is on construction sites. They are skilled laborers doing materials testing and inspection. The fastest-growing part of our business is the building code compliance segment. Those experts are highly trained and licensed. Florida is one of three states in the country that has an extra degree of experience required to have your license to do those services. This makes it harder for building officials and inspectors to move to the state. The economy is growing and blooming, but this particular segment of our economy is workforcebased and most of the local qualified experts are reaching their retirement age. Many inspectors have only one out of the four required certifications (electrical, mechanical, plumbing and structural), and it is very difficult for people to get the four

required certifications and make the process more efficient.

How has the COVID-19 pandemic and the resulting economic slowdown impacted your business?

While some headquarter companies in Central Florida have had to “shelter in place” from an expansion point of view, strategically, UES is heading in another direction. We have recently merged with two other engineering companies, one in Florida, the other in Nevada, giving us a coast-to-coast industry presence. This grows our offices to 29, expands our employee base to 1,500 and our annual revenues to more than $150 million. And, we are looking at additional opportunities to bring more companies into our fold. www.capitalanalyticsassociates.com

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INFRASTRUCTURE OVERVIEW

Orlando is starting to reap the rewards of its $15-billion infrastructure program launched in 2017.

( ) indicators. As well as providing technical assistance valued at up to $150,000, the USGBC provides training and online resources for authorities.

While Orlando’s ecosystem is a blessing, its geographical position makes the region particularly vulnerable to climate change-associated events, such as hurricanes, water erosion and flooding. In 2019, the Army Corps of Engineers funded an effort to restore tons of sand to Brevard County beaches eroded by time and hurricanes. Although hurricanes can be blamed for part of the erosion, the way the port is built, including the presence of jetties, has a huge impact on erosion.

At the beginning of 2019, Orlando’s fight against climate change was given a huge boost when billionaire and former New York City Mayor Michael Bloomberg awarded five cities – including Orlando – $2.5 million for climate change prevention projects as part of the American Cities Climate Challenge. Orlando’s plan will revolve mainly around the impact caused by carbon emissions from vehicles, and the city will add 150 electric vehicle (EV) charging stations by the end of 2020 as well as adding 50 EVs to rental car fleets through a partnership with Drive Electric Orlando and the Orlando Utilities Commission. The money will also be invested in energy efficiency programs, 48 | Invest: Orlando 2020 | CONSTRUCTION & INFRASTRUCTURE

incentives for green building and expanding solar programs. And at the beginning of 2020, Florida lawmakers began to consider building more EV charging stations on state highways between Orlando and Tallahassee.

Water The Floridan Aquifer provides water to millions in central Florida, including Orlando, but huge population growth and agriculture in the region are taking its toll on the 100,000-square-mile water system.

For many years, controversy has raged over a decision by state authorities to sell Florida’s water to private companies, including Nestle. The Floridan Aquifer feeds the nearby Santa Fe River, from which the owners of Ginnie Springs are pumping water to sell to the multinational bottled-water company.

In the latest permit renewal, the owners announced they would quadruple the amount of water pumped from the Springs to the full amount allowed – more than 1 million gallons per day. This sparked outrage from surrounding communities, not only due to the use of public resources for a private company’s profit, but also because many see this as promoting the use of plastic bottles. And local business owners who

CONSTRUCTION & INFRASTRUCTURE OVERCONSTRUCTION OVERVIEW VIEW

Greg Meyer Principal Stantec

What are the advantages of having offices located in Orlando?

Because of the work we do in the theme attraction market, it does take us to places like China, South America and the Caribbean. Orlando is a great place to be in the attraction business because of its very nature as a home for so many major attractions. Disney World is the No. 1 attraction in the world. More people visit their parks here in Orlando than any other park location globally. Orlando is a hub for the themed entertainment world.

provide canoe, inflatable and diving gear rentals to tourists are also suffering because of the overpumping of the aquifer.

Electricity Orlando’s electricity is provided by Duke Energy and Florida Power and Light (FPL), providing competitive rates in commercial and residential energy. The average commercial electricity rate in Orlando is $0.0938/kWh, 2.9% lower than Florida’s average and 7.04% lower than the national average.

Equally, the residential electricity rate in Orlando is $0.1111/kWh, 2.71% below the state average and 6.48% below the national average. But for industrial rates, Orlando’s utilities charge $8.04/kWh, which is equal to the state average and 20.54% greater than the national average. However, for those companies that qualify, Orlando offers generous incentives and rebates for its utilities.

Every year, the region’s power infrastructure comes under scrutiny during hurricane season, with frequent, prolonged blackouts despite the best efforts of utilities. In September, Florida lawmakers introduced a proposal that would expand the rollout of underground power lines across the state, increasing their reliability during storms, but warned

Which of the services offered by the company are in greatest demand?

Stantec has three offices in Orlando and in our Baldwin Park office we have three key disciplines: architecture, interior design and landscape architecture. But we don’t really like to say that one is more important or more necessary than the other. It has to do with the nature of the work we do. The theme entertainment work is a collaborative process between our team and the client’s team. It’s an integrated approach. It’s more about the process and the final result to create a great destination where people want to be. Our other two Orlando offices work in the power and transportation sectors and provide services to a variety of clients, including the Florida Department of Transportation How were your collaborations impacted by COVID-19 and what is your outlook?

Online platforms allow you to interact, and to be honest, we were using them before COVID-19. Since we’re a global company, we use an online service that lets our offices interact and collaborate as a team. Having this infrastructure in place allowed us to continue to conduct business and keep projects moving. Our backlog remains strong. We are getting requests for new work, as well, so we are actively working on proposals for new clients during this time.

I am very optimistic and bullish about future work. www.capitalanalyticsassociates.com

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INFRASTRUCTURE OVERVIEW

Orlando has committed to relying on 100% clean and renewable energy by 2050.

this initiative would more than likely increase power bills for consumers. Utilities such as FPL and Duke Energy Florida typically have incorporated stormhardening costs in their base electric rates, which are set for multiple years.

Alternative energies As more and more wind turbines and solar panels are installed, the price of renewable energy decreases in Orlando. The city is committed to powering 100% of municipal operations through renewable energy over the next 50 years. In February, the Orlando Utilities Commission (OUC), the second-largest municipal utility in Florida, announced its new strategic plan would see net-zero carbon emissions by 2050 and a 50% reduction in CO2 by 2030. OUC provides electric and water services to more than 400,000 customers in Orlando, St. Cloud and parts of unincorporated Orange and Osceola counties.

The Sunshine State also is one of the leading states in photovoltaic (PV) energy generation for obvious reasons but in 2019, Orlando began to take PV energy a step further with the announcement of a groundbreaking hydrogen storage system that would help eliminate intermittency in solar generation, partially funded by $4 million from the U.S. Department of Energy. PV 50 | Invest: Orlando 2020 | CONSTRUCTION & INFRASTRUCTURE

developer Invenergy is also spending $200 million to install two 75MW solar plants in Osceola County.

Looking ahead Orlando’s key infrastructure projects to ensure resilience are progressing well. With less traffic as a function of the coronavirus pandemic, work on the I-4 Ultimate project is picking up pace. Equally, work on the Orlando to South Florida Virgin Train expansion is continuing at full speed, making day trips to Miami and West Palm ever more attainable. Meanwhile, phase one at the Orlando International Airport’s SouthTerminal is well underway and expected to open in late 2021.

But Orlando’s population is expanding, and this is likely to challenge the region’s forward-planning skills. Orlando is adding about 1,000 new residents per week – more than double the rate of growth of the United States, and the fastest growth rate of the 30 largest cities in the country.

To integrate the growing population seamlessly, Orlando cannot lose focus on its infrastructure priorities and needs to move forward with one eye on the potential for climate events to disrupt progress, not to mention unpredictable events like the COVID-19 pandemic.

Transportation & Logistics: The greater Orlando area is a multimodal transportation hub that caters to the needs of millions of visitors and to its rising resident population. It is working to balance its rail, bus, ride-share and lastmile options to cover all the existing gaps while also dealing with the uncertain future provoked by the COVID-19 pandemic.

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Mobility goals: The city is working to solve the transportation mobility puzzle with one eye on the future As the theme park capital of the world, Orlando attracts a lot of visitors. It is also attracting new residents at a brisk pace. Moving all these people around takes a coordinated transportation strategy and in Orlando that means providing multiple options that are reliable, efficient and affordable, although COVID-19 has added an element of uncertainty to the mix.

The Orlando MSA added over 438,000 new residents from 2010 to 2018, going from 2,134,402 to 2,572,962 residents, a 20.5% gain. It ranks fifth in the U.S. Census Bureau’s top metro areas demographic growth report.

A glimpse at the statistics for the City Beautiful itself reveals a 2019 population totaling an estimated 287,442, up 0.6% versus 2018, with a median age of 33.9.

This growth shows no signs of stopping as Orlando’s Economic Partnership 2030 Report estimates Central Florida will add 1,500 people per week for the next 10 years to reach 5.2 million residents. With great growth comes great infrastructure needs, and Orlando has all hands on deck to provide the key assets that will enable its inhabitants to move seamlessly for both leisure and business purposes.

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Warehousing & Utilities industry employed 46,800 people in March 2020, prior to the COVID-19 outbreak, amounting to 3.5 percent of the total workforce. Orlando calls itself the most connected city in Florida, and for good reason. It is home to the distribution centers of 1,540 logistics companies, including industry heavyweights such as Amazon, Publix, Walgreens and CVS; three major ports are located less than a two-hour drive away, seven airports are within 100 miles of the city, providing access to more than 175 destinations worldwide. But never rest on your laurels: The area also has a pipeline of $10 billion in transportation infrastructure investments. The Orlando International Airport (MCO), dubbed the “crown jewel of the region” by the Orlando Economic Partnership, served over 50 million passengers in 2019, or over 136,000 people per day. That represented a 6.1% increase over 2018. It also conducted 7,416 cargo operations.

Initiatives and investments Orlando’s ambitious $10 billion transportation infrastructure investment plan includes $2.3 billion for I-4 Ultimate, the I-4’s upgrade that will connect ( )

TRANSPORTATION & LOGISTICS INTERVIEW

Expansion Orlando International Airport hosted 50 million passengers in 2019. It is making room for more

Phil Brown CEO – Orlando International Airport What are the most important recent milestones for the Orlando airport?.

Orlando International Airport, in 2019, became the first airport in Florida to surpass 50 million annual passengers. Our central location, emphasis on customer service and close proximity to 60 percent of Florida’s population helped make Orlando the preferred choice for air travel in the state. Over the last two years, we have been engaged with the construction of the new South Terminal project, which will add 15 gates. We expect that when we start operations, we will have added capacity to handle between 10 and 12 million passengers flying in and out of that terminal. Our Northern Terminal complex has been expanded and renovated to take a facility originally designed for 24 million annual passengers and allow it to process 49 million.

In 2017, we opened an automated people moving complex, which consists of a parking garage with 1,600 parking places, a station for the inner-city passenger rail between Miami and Orlando International Airport and the people mover station, which will also serve the South Terminal complex. In mid-2022, Virgin Trains expects to be operating between Miami and Orlando International, so we will have a train service. In the past five years, prior to the pandemic, we have added the equivalent of Sacramento International Airport to Orlando, which is about 12 million passengers.

How are you using technology to further improve operations?

We were the first airport in the nation to use facial recognition at our federal inspection stations. U.S. passengers arriving in Orlando have the option to participate in it. The system, developed by Customs and Border Protection (CBP), allows passengers to step up to the booth where the officer takes a quick picture and matches it to a digital gallery based

on passenger information. It basically replaces fingerprints, which have become less efficient because some people’s fingerprints don’t show up well. There is also a congressional mandate that CBP has to identify foreign nationals leaving the country. We use the same technology that is integrated with the airport passenger system that essentially allows for automated boarding, which speeds up the process and makes it much more efficient for airlines and passengers. We have also implemented a resource management system that allows us to manage gates. One of our challenges is the limited number of gates in our complex, with 93 in total, but we also have airlines that want to increase service, predominantly the low-cost carriers. This management system is very important because it allows us to manage the facilities and to be more efficient. www.capitalanalyticsassociates.com

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Diane Crews President & CEO Orlando Sanford International Airport

What is the status of the renovation project and what changes are being implemented?

Our terminal expansion project is on schedule for completion in the fourth quarter of 2020. Basically, we are taking the existing footprint of the airport and making it more efficient and user-friendly for passengers and staff alike. Also, we are continuing to grow, and we know that maybe 10 years down the road we will need a new terminal building, but in the meantime, we need to facilitate our ongoing growth so we are adding four new gates and related improvements. For example, we are consolidating screening into one location, creating more wayfinding signage and pathways to help passengers get to their destinations with more ease, adding more bathrooms and baggage belts, and even changing the façade of the airport to include an extended canopy to keep people out of the rain. We want our visitors to always feel comfortable while they travel.

Our airport code is SFB, which we have adopted as a motto to mean Simpler, Faster, Better. Therefore, it is important that the changes we’re making reflect this ideology. That’s what sets us apart.

To what do you attribute the significant passenger growth you have been experiencing?

I attribute the passenger growth to increased public awareness, getting the word out and letting people know we are here and that we offer over 75 nonstop destinations. The growth of the region has had a significant impact as well. We bring our passengers an easy and convenient experience overall, and that is very appealing.

The Orlando Sanford International Airport has been used mostly for leisure travel, especially because our flights do not have the frequency that business travelers need. However, that is starting to change. We are seeing more business travel, and we are going to be working toward increasing that component of our operation.

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Orlando International Airport was Florida’s busiest airport in 2019.

( ) the Gulf of Mexico to the Atlantic Ocean. Starting at Florida’s Turnpike, it spreads across Downtown Orlando into Lake Mary. The plan calls for 21 miles of widened, modernized interstate highway; the modification of 140 bridges; the addition of four express lanes and the reconstruction of 15 major interchanges. Wekiva Parkway, a $1.6 billion project, is also an integral part of the plan. Running westsouthwest, it connects I-4 in Sanford to the beltway system in Apopka, close to U.S. Highway 441. The Creative Village project, a 68-acre, $1 billion livework-play innovation, answers the call for a transitoriented, dynamic neighborhood rooted in mixed use.

Videogame giant Electronic Arts announced it would move to the disruptive development by 2021, while the University of Central Florida and Valencia College will both develop campuses there.

On the rail front, Orlando will host the multibilliondollar Virgin Trains USA expansion. Virgin has

TRANSPORTATION & LOGISTICS OVERVIEW

Greenways and Trails System, which recognizes the inherent positive impacts of ecotourism, the Sunshine State is looking to allocate a $50 million investment for a coast-to-coast bike trail. The Florida Coast-to-Coast (C2C) Trail will extend over 250 miles, connecting the Gulf Coast to St. Petersburg.

Making the most of the devastating COVID-19 crisis, the City Beautiful is hitting the gas pedal to advance critical infrastructure projects already underway. On April 11, 2020, Gov. DeSantis announced that some work on the I-4 Ultimate project will finished up to two months ahead of schedule. Reduced traffic resulting from the enforced quarantine measures allowed for added lane closures and extended working periods.

connected Miami, Fort Lauderdale and West Palm Beach since 2018, and the project is looking to extend its reach. It will add 170 miles of track toward Orlando for its second developmental phase to cover a total 235 miles by 2022. The project is even assessing a possible stop at Disney World.

Local commuter rail service SunRail’s hopes to expand its operations, however, were dealt a blow in 2019. After a 17-mile, $186.9-million southern expansion toward Osceola County, SunRail was eyeing a second, northward expansion to the city of DeLand for an added 12 miles through a $77 million investment, but the plan was derailed by Volusia authorities who backed out of the deal in favor of a slimmed down commitment.

Logistics-wise, operations in Orlando are poised to reach new heights with the $2.1 billion South Terminal expansion for the MCO and the $650 million expansion of Port Canaveral. As an integral part of the Florida

Orlando International Airport As a state highly exposed to international trade toward Latin America and the Caribbean, the MCO acts as a beacon of both mobility and burgeoning economic activity. Data from the Florida Department of Transportation (FDOT) in April 2019 showed the airport employed more than 343,000 people and generated a combined $41.12 billion between direct and indirect activities. As such, it stands atop the Sunshine State’s airport rankings in terms of economic contribution.

Intent on maintaining its dynamism, the MCO implemented a $4.27 billion Capital Improvement Program approved by the Greater Orlando Aviation Authority in 2018 to bolster its capacity and significantly improve customer experience. The plan includes the extension of its 16-gate Terminal C with an additional three gates, giving it the capacity to intake up to six aircraft. Also in the works is the $2.15 billion South Terminal expansion, designed to service both domestic and international flights. Expansion work for the latter will increase the terminal’s aircraft capacity with 19 gates capable of accommodating narrow body, jumbo and super-jumbo aircraft. It is expected to be completed by 2021.

In parallel, an Intermodal Terminal Facility (ITF) extending over 1.3 million square feet will include up to three regional rail systems: SunRail, Virgin Trains USA and a still undetermined third system aimed at serving either the International Drive or the Convention Center Area.

But the MCO’s ambitious expansion plans were thrown a curve ball due to the sizable dent in business caused by the COVID-19 outbreak. In March 2020, President Trump issued a travel ban from European countries that directly impacted 92 inbound MCO flights. A month later, just 2,597 passengers departed from the MCO, a 96.6 percent drop compared to last year. www.capitalanalyticsassociates.com

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Terry Lloyd Director of Aviation Kissimmee Gateway Airport

What are some of the airport’s highlights in the last few years?

In 2018, we stood up a high school on the airport property, which is a great benefit for the local community. One of our flight training businesses added a full-motion simulator. We have a lot of flight training. We receive people from overseas and domestic areas in the Kissimmee Gateway Airport and train them to be professional pilots. We also have hangars for people to keep their private aircrafts.

While the final and definitive impact of the outbreak is still to be determined, actions to tackle the pandemic include the Greater Orlando Aviation Authority’s (GOAA) deferral of close to $17 million in specified payments originally due in May 2020. On April 14, 2020, the U.S. Department of Transportation announced the MCO would receive $170 million from the CARES Act Airport Grant Program to sustain the airport’s operations.

Railways SunRail is the City Beautiful’s first commuter rail transit system, launched in 2015 with an $800-million investment. It extends from the north end of the Orlando region in DeBary to Poinciana, in south Osceola County. To date, it spans 49 miles and 16 stations through four counties: Volusia, Seminole, Orange and Osceola. The system served more than a record 1.5 million riders in 2019.

A few years ago, a northern expansion was announced

What are Kissimmee Gateway Airport’s main areas of traffic?

We are the closest airport to the Orlando Orange County Convention Center, the largest convention center by volume in the United States. Our most important amount of traffic are corporate aircraft operators coming in to attend business conventions.

Besides that convention center, there are significant convention hotels that would stand out tremendously.

Business convention traffic has the most economic impact for us.

What market are you targeting?

The National Business Aviation Association Convention is our target market. They visit us every two years, and that convention has the largest economic impact for us. One of the reasons they select Orlando is because we have the airport capacity.

How does the airport help business attraction?

If you’re looking at investing in Orlando, Orange County and the city of Kissimmee are business friendly and very proactive. Most of our residents in the city are pro-airport. We provide training for some of our residents; when they graduate from high school they can get career education at their local airport, and it results in fairly high-paid jobs. We are kind of training our own workforce here for anybody who wants to come in on the education side and invest.

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As one of the most populated areas in Florida, reliable public transportation is a necessity in Orlando.

TRANSPORTATION & LOGISTICS OVERVIEW

to stretch toward north Volusia County, linking DeBary with DeLand. In September 2019, however, Volusia authorities backed out of the city’s portion of the deal.

It had agreed to pay $20 million to help finance the trains’ operations.

Another star rail project is the former Brightline, rebranded as Virgin Trains USA, wtih a $3.5 billion investment that is poised to offer fast intercity passenger rail service linking Orlando International Airport and Miami with stations in Fort Lauderdale and West Palm Beach across 160 miles. The new railway spans from an existing station at West Palm Beach and a new station at Orlando International Airport. The ambitious project has big plans for Orlando. Virgin Trains envisions a station near Disney World and an extension toward Tampa further down the line. The MCO also sees synergies with the project as its intermodal facility is looking to welcome the new track. Early estimates indicate it will carry 3 million passengers in its first full year, starting in 2022.

Lynx Amid the SunRail extension debacle and user dissatisfaction with the fact that it does not operate a night shift and during the weekends, Orlando inhabitants turned toward the Central Florida Regional Transportation Authority (Lynx) bus transportation service. The service covers the city of Orlando, and Orange, Seminole, Osceola and Lake counties, as well as parts of Polk and Volusia counties, an area extending over close to 2,500 square miles and inhabited by more than 1.8 million people.

Lynx’s operation is not without its challenges, however. The LYNX bus fleet counts 310 units, the same number it has had since 2009. By comparison, Disney World uses 432 buses to service 40 square miles of theme parks and hotels. Unsurprisingly, the Orange County’s sales tax survey showed 31.5 percent of the 10,700 people who ride the bus wanted an extended Lynx public bus service for their homeworkplace displacements, more bus connections to SunRail and a higher frequency of buses.

LYNX’s issue is primarily financial. The lion’s share of its revenue comes from four local funding partners: Orange, Osceola and Seminole counties, plus the city of Orlando. These four entities amount to about 53 percent of the total budget. It also generates funds from fares, advertising fees, contract services, interest and other forms of income that amount to around 24 percent of the total budget. The remaining 22 percent comes from federal and state funding. LYNX’s revenues for FY18 totaled $127.5 million, whereas its total expenses for the same period amounted to $158.5.

To tackle these issues head on, LYNX is working on a series of initiatives to render its service more efficient and safe, especially when the Dangerous By Design 2019 report from Smart Growth America ranked the Orlando-Kissimmee-Sanford region at the top of the list of the most threatening for pedestrians. Most noteworthy is LYNX’s effort to acquire electric vehicles to not only provide sustainable and environmentally friendly transportation services, but also to become less impacted from gas price variations. To this end, the Federal Transit Administration (FTA) will allocate a $1.9 million grant to purchase seven electric buses, to be procured by Proterra Inc. These first units will service the LYMMO (a free circulator bus operated by LYNX) Grapefruit, Lime and North Quarter lines. In parallel, the Orlando Utilities Commission is assisting in the procurement of $900,000 worth of charging stations and batteries to help LYNX successfully deploy the project. www.capitalanalyticsassociates.com

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TRANSPORTATION & LOGISTICS OVERVIEW

Ride-sharing In December 2019, software maker Atlassian published a study in an effort to promote its software solution Jira Align. Its findings established that an average Uber or Lyft ride in Orlando costs $10.71, which ranked among the lowest nationwide. The study analyzed the country’s 50 most populated cities, taking into account both companies’ published rates. Although these services tend to worsen congestion issues by having vehicles circulating continuously for eight-hour periods at a time, its cost makes it a viable alternative to fill the gaps not covered by SunRail and LYNX. The city took note of the window of opportunity and launched a pilot Rideshare Hub Pilot Program in May 2019. The idea is to bolster Orlando’s nightlife economy by providing dedicated pick-up lanes for cabs and ride-share units for people to transit seamlessly out of the city’s Downtown during late-night hours. The program is expected to improve traffic and safety in the area.

According to Green Works Orlando’s 2018 Community Action Plan, the City Beautiful is at the forefront of providing its inhabitants with alternative means to facilitate foot, bike, carpooling and transit trips. To date, 250.5 miles of on-street bike lanes and 36.2 miles of off-street bike trails have been constructed throughout the city of Orlando. Close to 53 miles of these routes have wayfinding signage to help guide cyclists to their destinations. City staff estimate approximately 232,000 trips per month take place on the trail network. Also, the city is developing the Orlando Bicycle Beltway, an 8.5mile loop trail winding through the Central Business

Orlando has constructed 250.5 miles of on-street bike lanes and 36.2 miles of off-street bike trails District. It is designed to link the existing Bumby Path, Cady Way Trail, Gertrude’s Walk, Orlando Urban Trail and Lake Underhill Path.

To integrate smart technology to improve transit ridership as well as alternative mobility options, the city is also developing an app that enables users to access real-time information about their transportation routes, as well as offering a unified payment platform within the app for LYNX and SunRail trips. The goal is to improve user experience and travel expediency.

Moreover, the city is working on a car-sharing program targeted at low-income communities to boost mobility.

Technology In Orlando, technology rhymes with sustainability, mobility and safety. In December 2019, the city

Gary Huttman Executive Director – MetroPlan Orlando

The I-4 Ultimate and the Wekiva Parkway are halfway through construction, with estimated completion dates in 2021.

Their openings will reduce traffic congestion. A beltway around the Orlando metro area is going to take some traffic out of the heart of Orlando. Truck traffic will not be allowed in the managed lanes of I-4, and that is going to be helpful for commuters and those who need to get to the Downtown area quickly. MetroPlan Orlando faces the continued growth in the region by updating our plans as necessary, making investments in transit and other options for people to get around, whether that is building bike lanes or more sidewalks. Our current long-range transportation plan has a heavy investment in premium transit.

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TRANSPORTATION & LOGISTICS OVERVIEW

Laura Kelley Executive Director –Central Florida Expressway Authority (CFX)

CFX is advancing mobility solutions through innovation and collaboration. Emerging technologies and forward-thinking policy at the state level are allowing CFX to look at opportunities to incorporate multimodal corridors and intermodal facilities within its right of way in anticipation of emerging trends like Mobility as a Service (MaaS). As we widen roads in Central Florida, we are also looking at bringing new opportunities for other modes of transportation and setting aside space for them. The first example of this is the Virgin Trains USA rail under construction on sections of CFX’s SR 528, providing connectivity from Orlando to Miami.

approved a pilot project relating to e-scooters. In January 2020, Lime Micromobility introduced a fleet of 200 e-scooters to the streets of Orlando, including the provision of six training sessions to users to ensure the correct use of the scooters. The e-scooters are meant to replace Lime’s dockless bicycles, which are scheduled to be progressively phased out. How COVID-19 will impact these plans is uncertain.

In June 2019, the Sunshine State’s House Bill 311: Autonomous Vehicles (AV) was signed into law. It enables the Florida Turnpike authority to establish P3s with private entities to implement autonomous vehicle systems in Florida. This bill’s support of AV technology mirrors the technology’s popularity in Orlando, as it was part of the 2017 Smart City Council Readiness Challenge, an initiative sponsored by a network of spearheading corporations advised by top universities and laboratories to develop a comprehensive smart city plan. Both Orlando and Orange County capitalized on the opportunity to materialize smart transportation solutions based on three pillars: enhanced user experience, safety improvement and decongestion through the integration of sensors and advanced communications systems into public safety programs.

The U.S. Department of Transportation also designated Orlando and the Central Florida Automated Vehicle Partnership as an automated vehicle hub. The latter groups local academic, private sector and government agencies collaborating to provide the bedrock for safe testing, application demonstration and deployment of new automated vehicle technologies. It is the prelude to grant Orlando the capacity to deploy new vehicle technology.

On the safety front, the FDOT is looking to coordinate

with Seminole County to deploy cameras able to calculate near-miss collisions to track and use preemptive action related to potential accident patterns in real time, employing more of a preventive rather than a corrective capacity to address car crashes.

Orlando’s academic institutions are also joining the AV fray. Florida Polytechnic University is working with the Florida Turnpike enterprise to build the 400-acre SunTrax testing facility, scheduled to be ready for testing by 2021. Meanwhile, the University of Central Florida’s (UCF) Center for Advanced Transportation Systems Similation is working to model and deploy human-machine interfaces. These efforts are aligned with Orlando’s Vision Zero, which looks to eliminate traffic fatalities by 2040.

On the sustainability front, it is worth noting that Orlando has continuously moved to alternative fuels for its vehicle fleet. Measures include an all-electric motor pool at City Hall and electric motorcycles for the Orlando Police Department. Moreover, Orlando converted more than 30 trucks from its waste disposal fleet to Compressed Natural Gas and hydraulic hybrid vehicles.

Committed to the Energy Secure Cities Coalition, the City Beautiful is set on transitioning 100 percent of its 2,389 city vehicles to alternative fuels by 2030.

Looking ahead While challenges abound and the COVID-19 outbreak has pushed the brakes on the operations of certain links of the transportation value chain, the city of Orlando continues to work full steam ahead to ensure the right combination of transportation infrastructure, overhaul and modernization work. The goal is to provide its citizens with a wide array of options that can www.capitalanalyticsassociates.com

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TRANSPORTATION & LOGISTICS OVERVIEW

answer their specific needs in a cost-efficient way, all the while making sure its sustainability goals are attained.

The Orlando Economic Partnership 2030 Insight Into Orlando’s Future states that Orlando is one of only 10 regions in the United States to have the AV Proving Ground distinction from the U.S. Department of Transportation and is at the forefront of LiDAR, a light and sensor mapping technology critical for the future of AV. Technologically-intensive local companies like Luminar Technologies are showcasing significant advances in research and development of applications for these technologies. By 2021, the insight piece also anticipates the completion of a $11.9-million grant-supported project from the Advanced Transportation and Congestion Management Technologies Deployment (ATCMTD) program. After full deployment and scalability is achieved in the coming years, Orlando will boast a “Smart Community Mobility on Demand” framework, capitalizing on ride-share products to provide low income and underserved segments of the population improved access to employment centers, education and medical facilities and grocery stores through coordinated trips and automated shuttles. The program includes sensors and new traffic technology

Orlando is one of only 10 U.S. regions to have the AV Proving Ground distinction from the U.S. DOT that seamlessly adapts to real-time traffic conditions, reducing congestion and increasing travel consistency and predictability; also reducing pedestrian and bicycle accidents through PedSafe, a connected vehicle technology system.

To make the most of these new developments, Orlando is pulling all the stops to materialize a generalized practice of community engagement, imbuing a social component into all transportation projects and initiatives going forward, for infrastructure and services alike.

Banking & Finance: Banks and economic activity in general could take a short-term hit because of the coronavirus outbreak, but the banking and finance sector entered the period of uncertainty caused by the virus on a strong footing, and helping customers keep their businesses afloat will be a continuing priority.

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Strong footing: The short term is uncertain but banking fundamentals solidified in 2019 and look to continue moving forward As with the rest of the country, Central Florida entered the COVID-19 global pandemic crisis on what the Federal Reserve called “a strong footing.” Job markets remained solid at least into February and economic activity rose, the Fed’s Federal Open Market Committee (FOMC), said in a March 15 statement.

Then the pandemic broke, and the first half of 2020 is likely to be remembered as one of the worst economic and financial crises in recent history, as millions of people stopped going out into the street and businesses closed their doors, waiting for the contagion to subside. Through it all, the region’s banking sector has stood tall, deriving strength from its solid growth in the past year, and the expectation across the industry is for a bounceback, albeit in a changed landscape.

Prior to the start of the crisis, Charlie Brinkley, President – Florida Region of First National Bankers Bank, spoke to Invest: about the resilience of the Central Florida economy and its banking sector, drawing from previous experiences such as the devastating 2008-2009 financial crisis. “Central Florida is a stable market … Florida was hit hard by the 2008 recession. We were at ground zero. Several 62 | Invest: Orlando 2020 | BANKING & FINANCE

banks closed. But as bad as we got hit, we probably got out of it quicker than anybody else. We hit bottom faster than a lot of areas. Orlando rebounded very very fast.”

The sector also benefits from a diverse market and population that has grown beyond its traditional tourism foundations, and the fact there is no state tax on income, attracting high-net-worth individuals from across the country. In fact, the greater Orlando metro market ranked ninth out of 399 similar-sized metros across the country and No. 2 in the Southeast for economic success in Area Development’s “2019 Leading Metro Locations” report. Speaking to Invest: prior to the COVID-19 outbreak, Daniel Zagata of Evershore Financial Group agreed that Orlando has been booming, and the financial services sector is playing a role in that. “Part of the reason it has become a catalyst for investors and inward migration is because Central Florida has increasingly expanded outward, including Lake Nona’s medical school and medical village. The amount of investment coming into this area is enormous. The population of highincome earners and the number of high-income jobs is continuing to grow. Orlando has been labeled as a ‘hospitality town’ due to the theme parks, but the ( )

BANKING & FINANCE INTERVIEW

Impact Merged banking giant to focus on technology for a greater impact on customers

Evan Wyant Orlando Market President & Senior Vice President – BB&T, now Truist How is Truist offering a unique customer experience and differentiating from other banks in the region?

As Truist, we now have several new areas of focus.

SunTrust and BB&T were both successful brands on their own, but together we make a better team.

Our Truist brand is focused on better technology for clients. Within that realm of the client, it’s important to balance technology and the human touch to sustain robust relationships with our community and clients.

That healthy balance between human interaction and technology will be a big differentiator. In addition, we will have our community banking regions, which will operate similar to a community bank. That is a unique differentiator that will allow us to serve our clients in a very decentralized manner.

How is technology impacting the banking sector?

Technology has driven many of the changes and growth in the banking sector. Having technology and data in the palm of our hands has been a great part of the success of the financial sector and for consumers.

Technology has made us more efficient. We are now able to provide technological tools that allow us to help our clients improve their financial lives in a much more efficient manner. At Truist, we will focus on providing that balance between techonolgy and touch, which ultimately will help our clients be more successful.

What are some trends in Orlando’s banking industry?

Orlando has been one of the fastest-growing markets in the country. Our community is focused on telling the whole story of the Central Florida community.

We have a robust tourism industry, but we also have numerous technology companies and governmentbased businesses that support the defense and spacecoast markets. Some of our services that are in most demand are those geared toward helping our clients be

more successful. We provide our clients with strategic advice serving them as a trusted adviser.

How are you meeting your commitment to underserved neighborhoods?

Over the next three years, we have committed a significant investment to underserved neighborhoods.

Through our Truist Community Benefits Plan, we will lend or invest $60 billion to low and moderate income borrowers and communities over a three-year period.

Additionally, we plan to further the legacy BB&T and SunTrust commitments to underserved neighborhoods by opening at least 15 new branches in LMI and/or minority communities across our footprint. I’m proud to work for an organization that is making a huge impact in our community. www.capitalanalyticsassociates.com

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Derek Jones North Central Florida Region Bank President Wells Fargo

How has the bank grown in the region in the last few years?

Throughout the years, we have continued to solidify our presence in the Central Florida market. We continue to see growth in households across our communities, as well as demand from our customers for small business, credit and mortgages. With a large branch network throughout the state and 42 branches across the Greater Orlando area, we provide our customers easy accessibility to help them achieve their financial goals.

What is your approach to recruiting talent?

We are continuously looking for great candidates to join our team. We have a great relationship with the University of Central Florida and other local schools, and every year, we engage with them to help bright individuals looking for opportunities consider banking as a career of choice.

A strong focus on diversity and inclusion continues to be a priority, not only in the way we hire, but also in the way we develop our team. For example, we have a new branch manager that is part of the Military Apprenticeship Program. We work with retired veterans to help them transition their leadership skills into banking, and we have found great success in recruitment through this program.

We have created two initiatives in the state where we can look at creating more recruitment and promotion opportunities for women and black/African Americans for leadership positions.

What is your outlook for the next six to 12 months for the banking sector in Central Florida?

From a branch banking perspective, it goes back to being there for customers. Some of them have been greatly impacted by the pandemic, while some have managed to find a niche in providing necessary services. Many of our customers leverage technology well because of its convenience, but over the next six months, we will see even greater digital wallet, contactless, card-free transactions, and we will need to help our customers with these changes as well.

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The success of the banking and finance industry in Orlando can partially be attributed to its community engagement.

( ) increase in university research centers, banks, real estate, and financial services has been huge.�

Performance The banking segment in Central Florida is dominated by large national banks such as Truist, Bank of America and Wells Fargo, holding well over 50% of deposits in the region. In terms of market share, as of mid-2019, JP Morgan Chase & Co. dominated the local market with an 8.9% share, Regions Bank came second at 3.67% and TD Bank ranked third at 1.94%, according to a consumer rankings report from J.D. Power & Associates.

In terms of employment, the finance and insurance segment in the Orlando-Kissimmee-Sanford MSA employed 4.4% of the population in 2017. A consolidation trend in recent years has seen the number of banks shrink in the state of Florida, and Orlando is no exception. Across the state there were 104 institutions at the end of 2019, down from 117 in 2018, but those banks are holding more assets. In 2019, banks in the state held just over $204 billion in total assets, up 1% from a year

BANKING CONSTRUCTION & FINANCE OVERVIEW

Marty McAndrew Commercial Banking North Central Florida Market Executive Wells Fargo

Pre-COVID-19, what were some of the strongest sectors in Orlando and how has the landscape changed for the bank?

Our economics group has shared with us that the economy as a whole was experiencing rapid growth and job creation before COVID-19. Going into the year, we were seeing growth in virtually all market sectors. In February 2020, the single greatest concern customers had was retaining top talent due to historically low unemployment rates. Financing commercial real estate growth across all asset classes was one of our priorities for 2020. As a result of COVID-19, we have pivoted.

Tourism remains a very important market to us because it essentially underpins the Orlando economy, but we don’t yet know how quickly tourism will recover as the pandemic continues across the globe. However, some other segments are still experiencing growth, including transportation and logistics. earlier. In the greater Orlando region, there were 45 banking institutions, the fourth-highest number in the state, holding nearly $53 billion in assets.

Community banking Despite the presence of the larger financial institutions, there is still space for smaller entities that have had strong activity for years, partly because of the area’s diverse landscape. “There is so much diversity in Orlando. There is a core group that has been here for a while, but there is also a large group that more recently migrated here. This keeps the region diverse both in culture and philosophically, so in this regard it makes it an interesting place to do business. We are also a gateway, maybe not as much as Miami, for the international community, which has been growing here as well. The Orlando area is really community-oriented and family- driven. It is not just the amusement park capital,” said Paul Roldan, CEO and co-founder of AllGen Financial Advisors in an interview with Invest:.

Given the pandemic, what are the main strengths of the banking sector?

The PPP loan system has been the signature relief program, and we have processed more than 150,000 applications nationally. We are particularly happy that 80% of those loans will go to small businesses with 10 or fewer employees because this segment of the market is in most need. Another interesting development is the Main Street Lending Program. We are supportive of measures to extend much needed financial support to small and midsized businesses. We are actively discussing our role in the Main Street Lending Program while the program continues to be finalized, and we look forward to working with customers who will be eligible for this program.

Unlike in 2007, domestic U.S. banks were in really good position in terms of financial health. While there was some dislocation in debt capital markets earlier in the crisis, government action has ensured that liquidity remains intact. As an industry, we are very well-positioned to deal with the challenges we will encounter. www.capitalanalyticsassociates.com

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A report by Independent Banker in February highlighted the advantages that local banks have over the larger, national institutions they compete with. The Orlando market president of Georgia-based Ameris Bank pointed to the fact that as deposits have increased by around 50% in the last decade in the region, large bank mergers have left the city with fewer bank branches and less emphasis on local business.

Against this background, bankers like Johnny Gibson, managing director and senior adviser of Fieldpoint Private bank, see opportunity. “Fieldpoint Private is a private banking and wealth management shop that was founded in 2008 by a group of entrepreneurs and former executives. These were individuals who were consumers of finance and were later in their careers.

They had come to the realization that they weren’t receiving the type of service they expected from their banks and financial institutions. They felt that Wall Street and the big banks had lost their way and service relationships were not up to par. They decided to establish a firm with the culture and service that they felt clients had a right to expect.” He added that with

The finance and insurance segment in the Orlando-KissimmeeSanford MSA employs almost 5% of the population.

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“the big, public firms, you see the ongoing pressure to meet quarterly results and demonstrate growth. That doesn’t always translate into what’s in the best interest of an existing client base. If your focus and resources are devoted to the next acquisition or reorganization, then how much time and resources are you dedicating to improving or maintaining the level of service and quality of care the existing client base is receiving?”

The smaller banks have also been very efficient in delivering help to small creditors during the COVID-19 crisis, according to a report by ClickOrlando.

Applications for the federal Payment Protection Program lifeline loans, designed to help small businesses cover payroll, rent and utilities during the pandemic, started pouring in from late April, right after being funded by the federal government.

M&A activity Despite the difficulties imposed by COVID-19, financial institutions tend to look beyond the scope of the next few months. Proof of that is the March 2020 acquisition of the city’s own Three Shores

BANKING CONSTRUCTION & FINANCE OVERVIEW

Bancorporation by Georgia-based United Community Banks, a $180-million transaction that includes its subsidiary, Seaside National Bank & Trust, and will allow the new owner to set a foothold into the busy Florida banking landscape.

“This transaction is consistent with our commitment to grow our commercial lending business and to deepen our client offerings. Seaside adds the ability to supplement our traditional retail branch and commercial model with a ‘branch lite’ C&I [commercial and industrial loans] focus. Our larger balance sheet and low-cost funding brings capital needed to continue to grow Seaside’s business and relationships,” the Georgia bank’s CEO, Lynn Harton, was quoted as saying by BizJournals.

Seaside has over $901 million in Central Florida deposits and four Central Florida locations, while its mother company, Three Shores, had total consolidated assets of $1.9 billion, total deposits of $1.5 billion and total loans of $1.4 billion, it added.

Other local institutions, such as First Green Bank, have been the subject of acquisitions in the recent

Jorge Gonzalez President & CEO City National Bank of Florida

How do you combine banking technology with the need to maintain a connection to people?

At the end of the day, we recognize that clients want multiple channels of connectivity, and some want multiple channels at different times. We have to provide that. At some point, they want to speak to a human being. At another, they want to engage with us through their smartphones. Our business model is peoplecentric; we are not a mass retail bank but a private and commercial bank. Our clientele values the relationship provided by people, but we have to provide the best technology to support our people in delivering the best possible experience. We have invested heavily in all the right applications and platforms to support our people and clients.

What challenges is the industry facing regarding data security and cyber threats?

The whole industry is facing cybersecurity issues, but the good news is that one of our main investment priorities is cybersecurity and privacy of information.

This is not going away. Having the right size is important because you have to have the capital, the resources and the talent to properly invest in this area. There is not much margin for error.

What new tendencies have you noticed in the banking and investment environment because of demographic changes in Florida?

I’ve seen a lot of people from the Northeast and California assess their tax situation and relocate to Florida. We have seen a great deal of wealth move to Florida and South Florida. Latin America also continues to be a large source of immigration and capital influx. We are also becoming more technology-driven, and that is going to drive another, different profile of investors and workers wanting to be a part of that industry. We have great pockets of economic growth driving migration and investment in our community. www.capitalanalyticsassociates.com

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Alfred Rogers Executive Vice President & Chief Lending Officer Valley National Bank

How have the bank’s priorities shifted with the CARES Act and PPP applications?

We have over $2 billion deployed to over 10,000 customers as a participant in the CARES Act loan program. This has been an opportunity for us to help our customers access the support they need during this time. I think we have navigated the situation well and despite it all, we have had the opportunity to grow our market share since the “big banks” did not have the capacity to provide our level of personalized service.

What have been the main opportunities that have emerged for the banking sector?

I think the large-scale adoption of mobile banking is overcoming previous resistance. This will create greater efficiency and online banking will advance to a great extent. We have experienced a tremendous amount of growth, particularly in Florida. The population and migration of new residences and businesses to the state has been strong, with our favorable tax environment and weather, as well as our affordable cost of living among the primary factors for attraction. People are much more mobile and are now evaluating the attractiveness of where they live and the lifestyle it can offer, especially in the midst of the pandemic. Florida can offer a lot of space and a great climate, combined with a favorable atmosphere for doing business.

What advantages does Valley Bank provide as opposed to larger sized institutions?

Our size is big enough that it allows us to offer competitive lending limits, a good retail presence and fairly sophisticated products. At the same time, we are not so big that we lose the connection with the community. We are big enough to carry out a $20-million to $25-million loan, but at the same time our customers have the personalized service that is available from Valley National. We have made a real effort to emphasize our technology and efficiency while simultaneously maintaining our personal touch.

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past, while Orlando’s Fairwinds Credit Union acquired Smyrna Beach’s Friends Bank in 2019. Fairwinds is one of the biggest credit unions in the region, with over $2 billion in assets. Another credit union, Addition Financial Credit Union (formery CFE Federal Credit Union) also completed its acquisition of Fidelity Bank of Florida in September 2019.

Financial sector M&A activity has picked up in the last few years as bigger players look to add resources and broaden their consumer base. Brown & Brown of Florida, for example, acquired Hays Companies in 2018 in part to add insurance resources, according to Peter Matulis, Executive Vice President and Profit Center Leader at Brown & Brown. “Employee benefits is one of the fastest-growing segments in insurance. By acquiring Hays, not only did we increase our revenue

Orlando is garnering notice for fintech, including digital invoicing, point of sale solutions and financial advisory in that space, but we added a number of talented individuals to our team. We were also able to incorporate some processes that we wanted to integrate into the existing Brown & Brown platform. Those changes have brought a whole new set of services to our clients across the country,” Matulis told Invest:.

Fintech A silver lining from the COVID-19 fallout could be the opportunity for tech-savvy lenders and fintech companies to forge ahead, as the reality of a potential long stint at home pushes even reluctant banking customers to rely on online, phone-based financial services for payments, collecting their paychecks, pay their loans and even restock their fridges. The move toward no-touch banking and online services was already well on its way before the pandemic, with even the biggest banks recognizing the need to go online.

In the greater Orlando region, the area has become a hub for the critically important sector, which includes companies that do digital invoicing, Point of Sale ( )

Market voices: A ccounting and financial services

Joseph Bert

We are seeing a benefit from offering to work as fiduciaries with our client.

We are seeing a growing trend of people looking for certified financial planning professionals who work with their clients strictly on a fee for service basis. It is the golden era for our profession with 10,000 baby boomers turning 65 every day. We have a retirement crisis in this country and professionals like us are positioned to help.

Chairman & CEO Certified Financial Group

The healthcare sector has a great deal of need, and healthcare in Florida is fairly specific. It is local, local, local. The senior-care business is robust. Florida is the reward for a life well-lived someplace else after all. The in-migration of retirees to our state propels that business; nursing homes, retirement communities, assisted living facilities, and the baby boom is still coming. That is an area where we have come to dominate because we are very involved with that industry on so many levels, including legislation.

Kenneth Rosenfield Managing Member, Rosenfield & Co PLLC

Farlen Halikman Shareholder MSL CPA’s & Advisors

We compete with the big national firms for staff and clientele. We have to offer the same level and more creative types of compensation while also offering a completely different work atmosphere that those firms don’t supply.

We also have to be different from all the firms our size and price competitive with the large firms. Ultimately this leads us to making a greater investment in our people. We don’t have the ‘grind them up and chew them out’ environment that the big firms have.

We are seeing a lot of demand related to digital transformation.

Organizations, even before the COVID-19 situation, are looking at their systems, especially their legacy systems and saying, ‘Hey, is this the platform that is going to get us where we need to be?’ From a technology consulting standpoint, I think that is one of the areas where we’ve had some exponential growth. Another area where we continue to see organizations focusing on is the internal audit and risk advisory functions. When the economy is robust and companies are generally profitable, they want to make sure their systems, controls and policies are functioning as designed to safeguard their assets.

Clay Worden Office Managing Partner RSM US LLP

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BANKING & FINANCE OVERVIEW

( ) solutions, financial advisory and many others.

Dozens of fintech companies are plying their trade in Orlando, with companies like automated accounts receivable solutions provider Biller Genie opening offices in the city as recently as January 2020.

Biller Genie’s President Garima Shah said in a statement that “the e-invoicing market is experiencing unprecedented growth, which is being driven by business owners who can’t keep up with consumers who continue to demand flexible solutions that make it easy for them to pay their bills online – now is the time for businesses to realize that automation is the key to plugging the drain on their bottom line. In just over a year, Biller Genie has grown into the leader in the AR automation category. This year, we are expanding operations into Orlando in support of our civic leaders in Florida, who put a great emphasis on attracting fintech companies to the area.”

Another startup that calls Orlando home, Fattmerchant, which was valued at around $140 million in February, offers small businesses the possibility to integrate their in-store and online payment processing — usually handled by different providers — into one single tool, including sales analysis, for between 30 to 40% less of their cost, which could prove life-saving for struggling smaller enterprises.

Those companies could also prove invaluable in helping customers, both companies and individuals, gain access to the stimulus packages approved between March and April by the federal government.

Regulations Few sectors are as impacted by regulatory changes as

the banking and finance industry. In the United States, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) is the overarching framework for the sector. Dodd-Frank was originally passed in 2010 in the wake of the financial crisis that led to the Great Recession of 2008. In 2018, DoddFrank was subject to a series of rollbacks that eased some of the burden on banks while leaving the core

In 2019, the Fed voted to lower the requisite level of cash and government bonds for most banks regulatory pillars of the act standing, including tough regulation of the biggest banks, aggressive oversight of financial institutions by the Federal Reserve, and the continued authority of the Consumer Financial Protection Bureau. However, the increase to the “Bank SIFI (systemically important financial institution)” threshold was put into effect, increasing the size at which a bank falls under mandatory increased Federal Reserve regulation from $50 billion to $250 billion.

However, although this seems like a considerable ( )

BANKING & FINANCE INTERVIEW

Green investing Financing for solar panels among the environmental initiatives for Seacoast Bank

Julie Kleffel Executive Vice President & Community Banking Executive – Seacoast Bank What were some highlights for Seacoast Bank in Orlando over the last 12 to 18 months?

The most exciting highlight we had in the Orlando market was the acquisition of First Green Bank, which added significant customers and team members to our Orlando group, as well as the company at large. But the primary focus was in the Orlando MSA. As a result of that acquisition, as well as our organic growth strategy, Seacoast is now the No. 1 Florida-based company in the Orlando MSA by way of deposits.

Highlight No. 2 is that this is the fastest-growing market among all the MSAs that Seacoast serves across the diverse state of Florida. The dynamic growth and diversification of the Orlando economy has been beneficial to the bank’s overall growth, which has also improved our ability to invest in our community.

How do you plan to incorporate First Green’s environmental initiatives into Seacoast?

Seacoast has been very focused on its promise to invest in you and your community, and this initiative aligns with that purpose. Probably, the biggest pillar is offering financing to consumers and businesses to install solar panels to provide sustainable energy. Because we’re a bigger institution now, we were able to extend the solar panel loan program and make it easier for customers.

We were able to give them access to capital faster by using some of our technology platforms. As well, First Green offered charging stations for hybrid and electric vehicles at their branch locations. We have expanded this program and are working now with some local partners to continue expanding it.

How will the implementation of the nCino Bank Operating System help Seacoast improve customer experience?

NCino is helping our team see customers from the

beginning of their journey through the end of their journey with full transparency. We are able to identify potential gaps or slowdowns in the process of taking care of our customers’ loan, from the time they apply all the way through to the time they close, book and fund the loan, to ensure that our customers are getting the best in class service. We also believe that the operating system is going to provide efficiencies as a result to that freeing of our bankers’ time as well as our shared services teams’ time to serve more customers at a rapid pace.

NCino is built on the Salesforce platform, which is one of the largest customer relationship management tools in the world, and we are looking forward to maximizing the opportunities that we can unlock by having Salesforce for all of our teams. www.capitalanalyticsassociates.com

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Gregory Dryden Orlando City President – Fifth Third Bank

The demand that is probably the greatest in Orlando is that for capital. There are companies taking advantage of growth opportunities in Orlando by expanding either through organic growth, by acquisition or by investing in vertical integration.

Capital is needed to fuel those investments and that, more than anything else, is the demand that we have here. From a commercial perspective, clients are also seeking trusted advisers. We are helping them by providing advice and guidance to manage the demands and the opportunities that come with this growth environment.

( ) weakening of the act, $250 billion is only the mandatory regulatory threshold. The Fed retains full discretion to strictly scrutinize financial institutions of any size. Therefore, the increase was mostly a technicality, and the Fed arguably came out with even greater authority as a result of the changes.

In 2019, there were moves to simplify regulations further, with the Fed taking into consideration bank size when it voted in October to lower the requisite level of cash and government bonds for most banks.

The Fed also voted to lower the frequency for submitting so-called “living wills,” which are the detailed plans banks draft for winding down in the case of a failure.

New EU regulations were also implemented in 2019 to provide greater protection of personal banking data.

The first such law is the Payment Service Directive 2 (PSD2). PSD2 is designed to harmonize and simplify cross-border cash transactions between EU member states in order to make freer trade and more permeable borders within the EU a reality. The framework allows certain third-party providers of payment and account information services to access individuals’ bank account information directly and view information such as account balances and spending habits in extraordinary detail. Beyond the obvious data privacy risks, this could also lead to customers having to endure even more targeted advertisements and transfer of their personal data to third parties.

Fortunately, there are aspects of the law that are designed to curb potential data privacy abuses. First, these third-party providers must apply to become Account Information Service Providers (AISPs) and be approved before they can access private account 72 | Invest: Orlando 2020 | BANKING & FINANCE

S&P Global Ratings said the base-case scenario from COVID-19 is a severe but short contraction data. To apply, these providers must be registered in their home country, but they are then free to operate as AISPs anywhere in the EU. The problem is that each country establishes its own standards for accepting AISP applications. This means that some AISPs may be able to access account information in any EU member country in perfect compliance with the law by cherry picking a country with lower standards under which to form and apply. Still, the registration process is a better protection of consumer data than no check at all. A better check is that even a fully registered AISP still requires consumers’ consent to access their data, and this consent must be explicitly requested and provided. PSD2 went into effect on Sept. 14, 2019.

Another EU regulation that affects individuals’ data is the General Data Protection Regulation (GDPR).

The GDPR has been in effect since 2018, but the first enforcement actions began to hit in 2019. One notable example occurred in the U.K., where the Information Commissioner’s Office (ICO) fined British Airways

BANKING & FINANCE OVERVIEW

and Marriott International for allowing breaches of confidential customer data. British Airways had to pay $228 million in penalties after a breach that affected 500,000 customers, while Marriott got hit with $124 million in fines for exposing 339 million guest records. Although these were nowhere near the maximum fines allowable under the GDPR, they were a clear signal from the ICO that lax data protection will not be tolerated.

In October 2019, traditional banking won a regulatory round against fintech companies when a federal judge struck down a move by the U.S. Office of the Comptroller of the Currency (OCC) to allow fintech providers special banking charters that would let them perform like a regular bank in some cases, such as providing loans. The OCC had said in 2018 that fintech companies could apply for the charters in what could have moved the U.S. banking sector toward a European-style open banking system. The banking industry, however, believes that awarding the charters would lead to an uneven playing field, and the federal judge agreed. The OCC filed an appeal to the ruling in December 2019, keeping hopes alive for open banking.

COVID-19 impact The scenario for potential loan default on a large scale caused concern in the region during the height of the pandemic. Some experts pointed out that the region is so geared toward catering to travelers that it might put many smaller business owners underwater.

Orlando’s 2.57 million inhabitants, afterall, can hardly support business activity for a city that received 75 million visitors in 2018.

Orlando is a growth market that is benefiting from the influx of investors from higher-tax states.

Ross Breunig Executive Vice President and Central Florida Market President – IBERIABANK Orlando is a tremendous growth market. The benefits derived from the influx of population into our Central Florida communities are felt across all industries, with healthcare, transportation and logistics, wholesale trade and construction certainly seeing significant benefits. That being said, there are very successful companies and individuals for us to bank. Adapting to the changing needs of our clients as it relates to leveraging technology to enhance the customer experience is among the notable changes in the sector in the last few years. Banks are investing heavily in that regard to allow clients to use mobile, web or digital platforms to utilize banking services.

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Kevin Miller President & CEO Addition Financial

What have been your top highlights for the past year?

In the last year we have made multiple changes, the biggest being our transition from a federal charter to a state charter. The state of Florida has a businessfriendly environment and they were able to offer us some additional regulatory flexibility; for example a much larger territory and additional flexibility in the way we conduct our business and investments. We changed our name from Central Florida Educators Federal Credit Union to Addition Financial. We have also been expanding our footprint and recently acquired a small bank. These efforts have been part of our focus on expanding our presence throughout Central Florida.

What makes Addition Financial different?

As a credit union, we are a not-for-profit financial institution, which means that our motivations are different than the for-profit institutions. A differentiator for us is our focus on the community and our educational ties. When we interact with our members, we focus on the educational aspect. We support education and we also make sure that we educate people about financial literacy. We partner with K-12 schools in Orange, Osceola and Seminole counties and we have student-run branches in some high schools in each of those counties. We train the students to run the branch and teach financial literacy to their peers.

What are your areas of growth?

A lot of the people who come into our branches are surprisingly young. The younger generations are looking for consulting and advisory types of services, while the older generation comes to our branches mostly for transactions. In terms of services, we have seen an uptick in demand from small businesses. We focus on smaller businesses that maybe don’t feel like they have enough size or capital to go to some of the larger financial institutions.

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Orlando is dominated by the larger banks, but community banks continue to play an integral role in the sector’s long-term success.

A release by local law firm Lowndes in April 2020 set the tone for companies, both lenders and creditors, that need to prepare for the worse: “Given the economic impact of COVID-19, both monetary and nonmonetary defaults on commercial loans are likely in the next few weeks and months, if not a reality already.

Both lenders and borrowers should consider initiating communication to discuss potential problems and to try to identify solutions.”

Another report by ClickOrlando quoted Florida’s Chief Financial Officer Jimmy Patronis saying that the state is advocating with financial institutions to start rolling out deferred payment programs for mortgage and home equity creditors that might find themselves out of a job as a result of the pandemic. “We’ve been advocating for 90 days of deferred payments,” the state officer was quoted as saying. Wells Fargo, the report added, issued a statement offering an immediate threemonth payment suspension for any home mortgage or home equity customer who makes a request.

An update on credit conditions by global financial services firm S&P Global Ratings said that the basecase scenario is still a severe but short contraction. But that companies below investment grade could fast see their credit ratings drop as the crisis unfolds. ( )

Market voices: Areas of growth

Ray Colado

Chairman, CEO & President Commerce National Bank & Trust

In Orlando and across the country, community banks serve Main Street and the small businesses that are the economic engine of this country. There are reasons and needs for large banks, but they do not serve Main Street and the small business owners like community banks do. An FDIC report showed that if a community bank were to leave its county, there would be no bank in that county.

With the advancements in technology, our challenge is to deliver services quickly to the next and current generation, while still providing the personal touch. We are only as strong as our community, and we have to deliver services quickly but in an old-school way because clients are changing. It’s the Amazon effect: people want their banking experience to be fast, like buying a product on Amazon, and we have to be able to deliver that.

Regions continues to invest in technology for our online and mobile banking channels, but at the same time, branches are still the primary place where people prefer to open accounts and have in-depth discussions about personal financial goals. In May, Regions formally unveiled the company’s most modern branch in the Orlando area to date. The branch’s open layout and modern technology reflect the design Regions is debuting in cities across Florida, the Southeast and the Midwest.

Beyond technology, the design places a greater emphasis on more personalized services from local financial professionals. Regions is working every day to make banking easier, more convenient and more meaningful. Our bankers are focused on having deeper conversations with the people we serve to help them reach their financial goals. We’re also offering the latest technology so when a customer needs quick, efficient service early in the morning, in the evening, or even on Saturday or Sunday, this branch has what that customer needs.

Tim Myers

Central Florida Regional President Seaside National Bank & Trust

Hans Hurst

Executive Vice President & Central Florida Market Executive Regions Bank

Lending continues to be solid, especially commercial. We are one of the Top 2 metropolitan areas in the country in terms of population growth. As people move into town, they financially support the growth of the community, which results in service-related and construction companies doing better. We focus the majority of our efforts on the commercial banking market. With that kind of growth, demand for loans continues to be quite good in the Orlando area. On the wealth side, we focus on business owners and the wealth they create through their companies. We have full trust and fiduciary powers, but we do money management as well, whether it’s trust related or not.

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( ) “Companies rated ‘B-’ and below will likely suffer most from rapid rating transitions, while the investment-grade segment is showing some resilience. We estimate a surge in the corporate speculative-grade default rate to above 10% in the United States. and into the high single digits in Europe. The massive policy response from central banks and governments around the world is likely to soften the blow, particularly with regard to financial market liquidity. Credit pressure is building up on emerging markets from U.S. dollar strength, massive capital outflows, commodity price falls, and the economic and health impact of COVID-19. A severe but relatively short economic contraction (our base case) will mostly affect weaker credits or those in the most directly exposed sectors. But a prolonged recession, beyond our base case, would have broader implications.”

Overall, however, the banking and financial industry has moved quickly to adapt to the new normal imposed by the pandemic, from remote working to social distancing. Technology, of course, has been key. “Our transition to working remotely due to COVID-19 has been seamless. Everybody is connecting and following up with their clients through online channels.” said Tom Goes, managing partner of Northwestern Mutual – Greater Orlando.

“We provide 24/7 access to online accounts on a secure client site and are fully utilizing our ability to aggregate all accounts (not just those with Northwestern Mutual) so clients can see their full financial picture in real time. Northwestern Mutual understands the importance of looking toward the future so we can be prepared for situations like this.”

Looking ahead While COVID-19 is dealing a blow to industries across the country, the banking and financial sector in the greater Orlando region remains on solid ground.

Consolidation is a trend that shows no signs of slowing down and fintech is gaining momentum among both large and smaller institutions.

Opportunity, many believe, often arises from a crisis and the pandemic should be no different.

How companies adapt now could pay dividends later. “This is a time for helping people navigate this unprecedented occurrence and providing them with an important service carried out with grace, confidence and reassurance. And when this is all over – we must remember this is temporary – have faith that what goes around comes around,” said Goes.

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Survey of Business Leaders During the course of the COVID-19 pandemic (March-June), Invest: surveyed the business leaders participating in its publications regarding the impact of the pandemic on their business, their level of concern related to economic impact and their readiness to minimize that impact. Overall, 62.6% of business leaders had seen a negative impact from the outbreak.

Looking at Orlando only, the numbers are surprising.

When asked if they had already seen the virus affecting business as usual, less than half said that was true, while 55.5% said they had not. Of the 90 respondents across sectors, including legal, banking and financial, tourism and real estate, more than half were completely confident (5 on a scale of 1 to 5) in their organization’s ability to minimize any economic impact. In Orlando, the confidence level was comparable to the overall average, coming in at 55%.

1. True or False: You have already seen the virus affecting business as usual for your company.

Overall

Orlando

True: 62.6%

45.0%

False: 47.4%

55.0%

2. On a scale of 1-5, with 5 being the highest level, what is your level of concern the virus will impact your business?

Scale

Total Respondents

Percentage

Orlando (Percentage)

1

2

2.2

5.0

2

12

13.3

5.0

3

29

32.2

20.0

4

31

34.4

45.0

5

16

17.8

25.0

3. On a scale of 1 to 5, with 5 being the highest level, how confident are you in your company’s preparedness to minimize any economic impact from the pandemic?

Scale

Total Respondents

Percentage

Orlando (Percentage)

1

0

0.0

0.0

2

2

2.2

5.0

3

9

10.0

5.0

4

33

36.7

35.0

5

46

51.1

55.0

Healthcare: Orlando’s healthcare system is built on strong foundations, with solid health indicators, a proactive approach to preventive healthcare and several world-class medical institutions and research facilities, but it could face a talent shortage in the near future. The region is also traditionally a retirement destination, and that shifting demographic – along with the emergence of COVID-19 – will likely reshape the industry and how healthcare providers operate.

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What next?: COVID-19 will reshape how healthcare operators provide service but a solid foundation will help the sector move forward Florida is a traditional retirement state, reflected in Orlando’s expanding over-65 population. It is expected that senior care will grow as a result of 1 million seniors moving to the Orlando region by 2030. This will mean that for the first time, this demographic will outnumber those 17 and under. The shifting population will impact the way healthcare providers operate and the greater need will especially impact the need for more qualified human capital.

Talent itself is an emerging theme for the healthcare system in Florida as the Teaching Hospital Council of Florida and the Florida Center for Nursing predict a shortage of 7,000 physician specialists and 114,000 nurses by 2025 and 2023, respectively. But while a shortage of staff may be in the cards, a removal of the certificate of needs program means there are many more acute-care hospital beds coming to Orlando.

Of course, the major theme of 2020 for all sectors, but more particularly healthcare, is the impact of the COVID-19 pandemic and the response of the country’s health systems. Despite Florida having more cases than other states, such as Pennsylvania, Michigan and Louisiana, deaths per capita are well below any of these peers at just 2.52 of every 100,000 people compared 78 | Invest: Orlando 2020 | HEALTHCARE

with Louisiana’s 10.2, clearly a demonstration of the strength of Florida’s healthcare sector and state-level response to the crisis.

Performance Orlando’s population is growing at a significant rate with expectations for the city to add 1,500 residents per week over the next decade, a 30% increase on today’s figures. The Orlando-Kissimmee-Sanford Metro Area’s population is expected to grow from 2.18 million in 2011 to a projected 4.02 million in 2047, according to the University of Central Florida Institute for Economic Competitiveness. With that in mind, Florida’s healthcare coverage is in need of expansion.

Primary care physicians in Florida see on average just 1,376 patients per year, which is down 0.2% on the year and also far lower than comparable states. In Georgia and Alabama, physicians see 1,536 and 1,568 patients, respectively.

Major healthcare systems in Orlando include Lake Nona Medical Center, AdventHealth, Orlando Health, Aspire Health Partners, Osceola Regional Medical Center, Central Florida Regional Hospital and the Nemours Children’s Hospital. Through the ( )

HEALTHCARE INTERVIEW

Care growth Free-standing emergency rooms, academic work are among the areas seeing increasing demand

Daryl Tol President & CEO – AdventHealth–Central Florida Division What are the fastest-growing areas of service and care in Orlando?

There are several. One is the free-standing emergency room. We have added quite a number of free-standing locations with doctors and emergency services in areas of need, instead of having to build a whole hospital. We are growing in our academic work around community cancer research. The cardiovascular institute is seeing high demand as well. We are also redefining our primary care model to include virtual care, which will allow patients to connect via video or text messages with their doctor.

What has been the impact of the healthcare industry as a dominant growth driver in the region?

If you look at Florida, and Central Florida in particular, growth is happening here in a significant way. We are managing a considerable line of growth in the senior and multicultural population. People from all kinds of backgrounds are moving into the state. We are responding to that in the way we design our system. We provide care for seniors and for people from all kinds of different backgrounds to communicate more clearly, enhance translation services and build locations in new communities, including communities of need that haven’t had healthcare historically. We believe our network should be accessible to everybody.

What are AdventHealth’s strategies for innovation toward quality care and improving patient experience?

The Center for Genomic Health is an important effort.

It will focus on personalization around the patient’s personal profile. It will help us understand which medications and types of treatments work better for each person and identify risk factors. We can start really investing in each patient’s particular needs.

A second effort is putting technology in the hands of consumers through our mobile app. We will launch its 2.0 version this year. It will alert people about care that is needed, help them in the scheduling of certain services and create price transparency. We have also launched a command center — the largest of its kind in the nation, both in size and scope of operations — where artificial intelligence will be used to provide the best care in how people get to our locations.

We’re a significant leader in robotic surgery. For a long time, our Nicholson Center has been a training center for robotic surgery. We have a number of robots there that surgeons use to perform surgery. In 2018, we were the first to purchase and perform a procedure with a new robot. We see robot technology improving, and we’re on the leading edge of that work as well. www.capitalanalyticsassociates.com

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Trey Abshier CEO Central Florida Regional Hospital

How would you characterize the healthcare industry in central Florida?

The Orlando area is ranked as one of the fastestgrowing cities in the United States. The influx of people moving to our area presents continuous growth opportunities and keeps healthcare in high demand.

HCA Healthcare is committed to providing quality healthcare and is growing to support our community.

We continue to evaluate opportunities to provide access to the services our communities need, such as the development of our new hospital scheduled to open in 2021 and adding new services and technology at our four HCA Healthcare hospitals in Greater Orlando: Central Florida Regional Hospital, Osceola Regional Medical Center, Oviedo Medical Center and Poinciana Medical Center.

Healthcare in our area is not a one-size-fits-all for patients. We operate with a number of non-hospital healthcare services like urgent care centers and freestanding emergency departments. It is important to us to bring healthcare options to local communities so we are there for them when they need us most.

The Orlando Medical City is a hub of innovation and research within Central Florida.

How did the hospital handle the pandemic’s outbreak?

From the beginning, HCA Healthcare’s Central Florida hospitals took an all hands on deck approach. We implemented enhanced safety precautions to ensure the safety of our patients, visitors and colleagues.

We enforced visitor restrictions, decreased entry points, introduced a universal masking initiative and started screening visitors and employees. The large scope of HCA Healthcare played an important role during the COVID-19 pandemic – we have had the ability to learn best practices, ensure ample PPE and equipment supplies and face the challenges presented

by COVID-19 together with a team of experts across the nation. A key that the leadership team focused on was communication – even ensuring we were overcommunicating with staff and patients.

( ) 2017-18 fiscal year, the busiest hospital was Florida Hospital – now AdventHealth – with 130,879 total admissions and total patient service revenues of $16.7 billion. The second was Orlando Health with over 75,000 admissions and more than $10 billion in billing, followed by Osceola Regional Medical Center with almost 24,000 admissions and more than $3.3 billion in billing. The pace of population growth offers great opportunities for expansion and several of these systems are wasting no time.

After the certificate of needs requirement was repealed, one of the region’s largest employers, Orlando Health, was already full steam ahead on an ambitious expansion plan. In mid-2018, the system announced a new emergency room and medical campus to be built in Lake Mary. With a total $360 million investment, the first phase is a two-story, 400,000-square-foot

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a new $250-million Orlando Health Jewett Orthopedic Hospital, expected to be completed by 2023. The facility will include 75 inpatient rooms, 20 operating rooms, five surgical training suites and 167,000 square feet of medical office space. And the 214,000-squarefoot Horizon West Hospital celebrated the completion of its main construction phase in September last year.

AdventHealth is also expanding. In September, it purchased the 12,000-square-foot Four Corners freestanding ER, as well as acquiring the 193-bed Heart of Florida Regional Medical Center and the 160-bed Lake Wales Medical Center. The healthcare system is also building a new $200-million, 100-bed tower in Winter Garden – the first in the area when completed in 2021.

Free-standing ERs are becoming ever more popular in Orlando and in Florida to provide relief to saturated ERs on hospital campuses.

Even with all the expansion activity, the hospital systems are not taking their eyes off the ball in terms of patient care. AdventHealth Apopka, AdventHealth Zephyrhills, Orlando Health South Lake and Orlando Health Central Hospital all made it into the list of 120 Top Hospitals of 2019 compiled by Leapfrog. Florida took the top spot in terms of number of hospitals on the list with 13. The award recognized hospitals that prioritize safety and quality in patient care.

free-standing ER, including 24 examination rooms, imaging facilities and a helipad, as well as a threestory, 60,000-square-foot medical pavilion offering lab and outpatient services. After its completion, the hospital system is already planning a second phase that will incorporate a 240-bed tower. In January 2019, Orlando Health secured more land at the Lake Mary Wellness and Technology Park to expand its presence further.

Shortly afterward, Orlando Health announced plans to build an imaging center and a medical office at its Downtown facility after securing plots of land on Copeland Drive and Orange Avenue. Estimates for the project come in at around $27 million and will feature a nine-level parking garage as well as a total 54,000 square feet of medical office building. Finally, in January this year, Orlando Health announced plans for

Policy updates One of the most significant developments for Florida’s healthcare system in 2019 was the repeal of the certificate of need (CON) law, which evaluates the need for any expansion of medical facilities.

Any hospital looking to establish new campuses or treatment centers in Florida had to apply through the burdensome CON process, which often left healthcare facilities tied up in paperwork and unable to provide additional services for patients. Deregulation means the requirement will be repealed for specialty hospitals, such as children’s hospitals but will still be required for nursing homes and long-term care hospitals.

Orlando hospitals already are taking advantage of the overhauled regulations. Orlando Health Arnold Palmer Hospital for Children and Nemours Children’s Hospital have all shown interest in expansion of their facilities but have been unable to go ahead because of CON regulations. Now, Orlando Health Arnold Palmer Hospital for Children wants to open a new pediatric heart transplant program.

The Affordable Care Act (ACA) was also back in the courts in 2019 as a group of Republican attorneys general and two governors argued that the act ( ) www.capitalanalyticsassociates.com

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Innovation A variety of avenues help bring to life Orlando Health’s technology aspirations

David Strong President & CEO – Orlando Health healthcare delivery environment and then reach out to companies outside of the healthcare sector to try to access their solutions to problems. And finally, there is a grants program. If there is a promise or idea that does not fit into any of those other three components, then we have the ability to try to help them progress through grants.

What are Orlando Health’s strategies for innovation in providing quality care?

One example of technology that we implemented is InQuicker, which allows patients to book their emergency department or urgent care visit on their phone. We also have the Orlando Health Strategic Innovations platform to bring to life our desire to be an innovative facility and organization. There are four components to it. The first is a corporate venture fund where we do direct investing in companies whose products or services would help the health system.

The second piece is the Orlando Health Foundry, an accelerator program to identify promising internal ideas that have the potential of being commercialized in the future. The third component is partnership tracks, where we identify problems within our 82 | Invest: Orlando 2020 | HEALTHCARE

What are some unique opportunities for the healthcare sector in Central Florida?

Growth is one piece of it. This is a market that has consolidated more than others, meaning that if you look at other markets in the state, there are five or six health systems in the community, but in Orlando there are only three health systems. Many people say that is a trend that will continue across the state and the country. The opportunities to grow are with the communities that are expanding, so we open new doors, work through innovation programs and think about where the market is moving and try to stay with it, if not slightly ahead of it, so that we can accommodate needs.

What is the expected impact of the recently opened Orlando Health Emergency Room and Medical Pavilion - Lake Mary?

The Lake Mary facility is our newest emergency room and medical pavilion. Within the last year or so, we have also opened two in Lake County, one in west Orange County and one in Osceola County. Our goal, with all of them, has been to improve access to healthcare for residents living in those communities.

The response to our first four facilities has been tremendous. So we expect the Lake Mary emergency room and medical pavilion will also be extremely popular.

HEALTHCARE OVERVIEW

Healthcare systems continue to expand their presence in the Orlando region.

( ) had no teeth after the non-subscription penalty was removed by the Trump administration. The essential argument was that the penalty for not taking out insurance could be described as a tax, but without this, the law is unconstitutional. The battle could end with the entire act being invalidated, jeopardizing access to healthcare coverage for many.

Over 1.7 million people enrolled in ACA plans through the Florida exchange during the open enrollment period for 2019 coverage — by far the highest enrollment of any state in the country and an increase of 4 percent on the year. If the ACA is invalidated in Florida, the implications could be substantial. A huge healthcare gap exists because the state has rejected federal funding to expand Medicaid, affecting those with income levels fall below the poverty line. But this hasn’t seemed to deter Floridians, 1.9 million of whom signed up for 2020 enrollment, again outpacing the rest of the country. For many Floridians who lost their jobs as a result of the COVID-19 pandemic, the ACA could be a lifeline.

Insurance According to TheSeniorList, the state of Florida ranks 22nd in the United States in terms of money spent on healthcare annually. The average individual with

private coverage spends $5,616 per year on healthcare, slightly below the national average of $5,640.78. Florida registered one of the lowest percentage increases at just 1.6% in spending between 2013 and 2017. The study found that costs for the same procedure vary wildly from state to state and even from county to county. For a relatively common Cesarean section, for instance, the Orlando metro Area was the most expensive in Florida with the procedure coming in at $12,000, while in the greater Miami area, the cost is $9,559.

In 2017, 12.5% of the population in OrlandoKissimmee-Sanford was uninsured, which is above the national average of 8.9%. In the area, 45.5% access employer coverage, 14.7% access Medicaid and 10.7% access Medicare. In Florida, the cost of insuring a single person rose from $4,517 in 2008 to $6,674 in 2018 and for a family, the numbers increased from under $13,000 to nearly $19,000. According to a report

by The Georgetown University Center for Children and Families, there were about 325,000 uninsured children in Florida in 2017, up from 288,000 in 2016.

Another fallout from the potential elimination of the ACA is the increased funding needed to finance Florida KidCare, a program that covers children up to age 18 and includes a subsidized health-insurance program for school-aged children based on both federal and www.capitalanalyticsassociates.com

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of those between 46 and 55 would participate in the Medicaid program if expanded.

In early 2019, Orlando’s Grace Medical Home, a nonprofit clinic for uninsured patients, expanded into a 19,000-square-foot facility thanks to donations from the local medical community and the city of Orlando.

The clinic has more than 3,600 patients registered in the area, staffed by volunteer nurses and physicians.

It is estimated the facility saves hospitals $500,000 per year by reducing non-urgent ER visits by 80%. But amid the coronavirus pandemic, healthcare services for the uninsured was one of the casualties. Safetynet health clinics, which serve one in 11 Americans or about 31 million people, faced a drop in donations, cuts in federal funding and staff and volunteer shortages. Despite the pandemic occurring after the 2020 deadline had passed, President Trump declined to re-open enrollment under special circumstances.

In 2019, Florida had the highest enrollment of any state in the country for ACA plans.

state funding. The end of the ACA would likely mean the end of federal funding for this initiative. According to economists, costs for the program will continue to rise over the next five years, with an extra $162 million in public funds required by 2024.

If the ACA remains in place, 2020 will be the first year premiums hold steady in the state of Florida as the system balances itself. Premiums soared in the last few years, mainly as the federal requirement to obtain healthcare was eliminated and insurance companies corrected rates to account for lower subscriber numbers.

But the market in Florida was more stable than anticipated, according to Steve Ullmann, a healthcare policy expert at the University of Miami. This is set to encourage increased subscription in the program.

For 2020 subscription, Orlando has five ACA insurers: Florida Blue, Bright Health, Centene, Molina and Oscar.

Current expensive and patchy access to healthcare perhaps explains why economists say that 260,000 people from low-income households would enroll in an expanded Medicaid program if the state accepted federal funding. This is around 44% of those eligible for the expanded support. The study showed that 75% 84 | Invest: Orlando 2020 | HEALTHCARE

Public health / Mental health Florida’s mental health providers see an average 703 patients per year compared with Georgia’s 829 and Alabama’s 1,185. One reason for this could be that Florida’s incidence of adults with a major depressive episode is lower than the others, at 6.12% compared with 6.72% in Georgia and 6.66% in Alabama. Fewer adults in Florida have a serious mental illness, with just a 3.56% prevalence compared with 4.17% and 4.23% in Georgia and Alabama, respectively.

Authorities in Orlando and Florida are making real efforts to address mental health issues. In July 2019, Senate Bill 1418 was passed, which requires a psychiatrist to warn law enforcement of a potential threat to public safety, previously an action that would allow the patient to file a lawsuit against the practitioner. And in the same month, it was mandated that Florida students from sixth to 12th grade must take five hours of mental health instruction as part of their curriculum.

The coronavirus pandemic has weighed on mental health for many, prompting several organizations to provide resources for counseling and support during the crisis. Orlando medical group Premiere Medical Associates set up a Care Chatline that allows those struggling with the pandemic to reach out to a team of licensed social workers and social work interns.

UCF Restores, a program to help veterans, active duty personnel and mass shooting and sexual assault survivors through post traumatic stress has expanded its services to incorporate coronavirus counseling.

Associations such as the National Alliance on Mental Illness Greater Orlando and Mental Health Association of Central Florida are also offering resources.

HEALTHCARE OVERVIEW

Babette Hankey CEO – Aspire Health Partners

A very unique and exciting opportunity for behavioral healthcare in Central Florida is the opportunity to integrate primary healthcare into our services and become that one-stop shop for anybody who has a behavioral healthcare issue, whether it be mental health, substance use or a co-occurring disorder. We also are focused on developing telehealth and telepsychiatry services that increase access to services, reducing the impact of barriers like transportation, service hours or location. Those are some things that are unique to not only Aspire Health Partners but also our behavioral health field.

Preventive health and disparities Despite a good record for mental health provision, Florida still has the third-highest rate of chronic homelessness in the United States, with 4,915 individuals in 2017, behind only California and New York. In 2018, Orange County was ranked 18th in Florida in terms of residents’ access to exercise opportunities, with just 87% of the population in reach of exercise facilities – far below peers Broward, Miami-Dade and Palm Beach. Orange County also ranks middle of the road in terms of food insecurity, with a 15.1% prevalence compared with best-performer Miami-Dade’s 9%.

About 15% of the Orlando-Kissimmee-Sanford population is living in poverty, which is higher than the national average of 13.1%. Females overwhelmingly are the largest demographic living in poverty, specifically those aged 16 and over. The most common ethnic group living in poverty is white, at 43.6%, followed by Hispanic and black at 28.5% and 16.8%, respectively.

This is consistent with overall population statistics, meaning poverty evenly impacts all ethnic groups within the metro area.

Thirty-day hospital readmission rates across Florida are relatively high, with a prevalence of 17.9%. Nationwide, the worst-performing region was the District of Columbia, with an incidence only slightly higher than Florida at 19.3%. Orlando has one of the lowest diabetes rates in the state at just 9% and despite having an adult obesity rate of 24%, this still sits on the lower end of the scale when it comes to counties in Florida. The adult smoking rate is low at just 14.5%. By almost all indicators, Orange County is a healthy area that has strong fundamentals to provide effective preventive healthcare.

About 15% of the OrlandoKissimmee-Sanford population lives in poverty

The county has a relatively high number of HIV diagnoses at 738 per 100,000 people but this pales in comparison with the highest prevalence in Union County, which recorded 2,445 diagnoses per 100,000 residents. However, disparities still exist for the LGBT+ community in the greater Orlando area. In Orange County, there has been a 60% increase in new HIV cases since 2012 among men who have sex with men while 25% of those who identify as LGBT+ did not see a doctor when they needed to because of fear of being mistreated as a transgender person.

Approximately 33% of those who identify as LGBT+ and saw a healthcare provider had at least one negative experience related to being transgender.

In terms of accidents, Orange County registered the third-lowest incidence of motor vehicle crash deaths in the state. But violent crime is one public health problem the county cannot shake. Its violent www.capitalanalyticsassociates.com

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Tony Jenkins Central Florida Market President Florida Blue

How does Florida Blue serve the growing population of Orlando?

We make sure to bring assets to the market that serve our membership and our growing population. That is one of the reasons why we partnered with Sanitas: to expand our service area and our ability to introduce different services to more areas. Through this partnership, we have introduced eight multicultural Sanitas Medical Centers, which incorporate primary care, specialty care and our Florida Blue Center sales and service in one convenient location. That is a very important asset for us as we diversify our products because this is a model that targets the growing Hispanic population.

What notable changes in Central Florida’s healthcare landscape have you observed?

Hospitals and provider offices are continuing to expand in areas where maybe there wasn’t a specialized service or hospital previously. The market is also consolidating.

We expect to see continued growth of specialty care, primary care and urgent care, but we will also see more consolidation. As the market grows, we also expect to see national entities enter the market. Consumer behavior and how technology is impacting the sector is one of the reasons behind these trends in the industry.

What innovations are you leveraging to better serve patients and provide easier access?

We are making sure that our digital platform is the best in class, allowing us to reach and talk to our members and business partners through our various technology platforms. We have a GuideWell Innovation team, which is looking into innovative ways to manage and leverage technology to enhance our member experience. For example, they have been doing work with virutal reality and the senior population. This is early stage, but we started our innovation division to embrace the idea of technology, and we have already launched numerous efforts to figure out what tools will work best for our space.

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Senate Bill 182 allowed the use of medical marijuana in Florida crime rate in 2018 was 681 per 100,000 residents, which despite being a 14% drop since 2014, is still the seventh-highest in the state. Similarly, homicides in Orange County have dropped almost 13% since 2014 but the county still comes in at No. 12 in the state in terms of homicide prevalence.

Medical marijuana Medical marijuana and CBD has become a gamechanger in the medical community as more and more profitable companies emerge within the industry. In Florida, Senate Bill 182, passed at the beginning of 2019, allowed the use of medical marijuana prescribed by a qualified physician. While legal, there has still been some pushback from legislators, namely an effort to limit the amount of the active THC product in medical marijuana to 10%. Veterans in particular protested against the cap, saying it would be harmful to those suffering post traumatic stress disorder.

Current prescribed marijuana can contain THC levels as high as 30%.

While medical marijuana has now been legalized for over a year in Florida, the next step for campaigners is the legalization of recreational marijuana, which has come across more hurdles. Political committee Make It Legal Florida is lobbying for the legalization of marijuana and aims to gather signatures to put the issue on the 2022 ballot after running out of time to file for the 2020 ballot. The proposal would allow those over 21 to “possess, use, purchase, display and transport” up to 2.5 ounces of marijuana and marijuana accessories for personal use. The proposal faces opposition in the Supreme Court and clashes with federal law, under which marijuana possession for recreational use is still illegal.

Technology In the COVID-19 era, telehealth services have become more essential than ever and healthcare providers are

HEALTHCARE OVERVIEW

David Carbone President & CEO – Osceola Regional Medical Center Telemedicine technology has been around for a while, with limited uses because both insurance companies and the government have decided historically not to cover it, stifling its growth. Unfortunately, it took a crisis to drive the use of technology. With the advent of the COVID-19 pandemic, the federal government made a decision to reimburse physicians and hospitals implementing telemedicine services, and it should only continue to grow. We are also heavily investing in robotic systems to assist in surgery, either for navigation or stabilization purposes, allowing more delicate surgery to be conducted.

now pushing all their efforts into providing remote healthcare services. In 2019, House Bill 23 laid out regulation for telehealth, which was already gathering momentum. But there was nothing like the coronavirus catalyst to spur on innovation. A range of healthcare providers are now offering virtual appointments across a broad range of specialties, including the Orlando Epilepsy Center, Vision Health Institute and Derrow Dermatology Institutes. In Central Florida, nonprofit Telehealth Access for Seniors was established in March to donate mobile devices to seniors to enable them to access medical services remotely.

Even pre-COVID-19, efforts were being made to bring more digital healthcare solutions to Orlando. Lake Nonabased Aviana Molecular Technologies is working with UCF on a mobile device to quickly diagnose infectious diseases and acute illnesses using sound waves.

AdventHealth has made significant investments in new technology, building one of the world’s most advanced operating rooms at AdventHealth Orlando, as well as a global robotics institute and a surgical prototyping lab.

Not to be outdone, Orlando Health launched EDie in 2019, a risk analysis software to identify at-risk patients of opioid abuse.

Research The education system in the Orlando Metro area reflects the need for more health practitioners.

Despite the largest sector for degrees earned in 2017 being business, the single most common degree awarded was in general psychology with 1,169 degrees, followed by registered nursing, with 915 degrees and general health services with 816 degrees.

The health and psychology education system has

The healthcare industry is a multibillion-dollar sector in Orlando’s economy.

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Healthcare and social assistance is the single-largest employer in the Orlando metro area, providing over 150,000 jobs.

expanded since 2012 from awarding a total of 3,028 degrees – or 19% of total degrees – to awarding 4,023 degrees – or 20.2% of total degrees. There is a reason why so many students in Orlando want to study a healthcare discipline – the healthcare and social assistance segment is the single-largest employer in the metro area, employing 157,215 people.

In a tight labor market, major hospital systems AdventHealth and Orlando Health are pulling out all the stops to attract and retain the best talent. In 2018, Orlando Health was recognized by Fortune’s Best Workplaces for Diversity, Advisory Board’s Workplace of the Year and Workplace Tranformation Honoree. The hospital provides a range of benefits, including the Healthy U program that offers various wellness programs, products, plans and services focused on employee health and well-being. During its recruitment process, AdventHealth also uses AI technology that analyzes the potential for staff turnover. It also recruits a high proportion of staff directly from local university UCF. Looking ahead The coronavirus has complicated the healthcare 88 | Invest: Orlando 2020 | HEALTHCARE

sector nationwide, testing how it is positioned to cope with a crisis on a global scale, but also opening up the possibility of innovation and novel technologies.

There are sure to be some long-lasting impacts after the crisis has been brought under control, but how will Orlando’s new healthcare system look? Orlando’s healthcare system is built on strong foundations, with solid health indicators, a proactive approach to preventive healthcare and several world-class medical institutions and research facilities.

The shortage of medical professionals in the next few years is sure to be at the top of the agenda for the industry, and talent retention will likely be a key priority going forward.

But an additional factor may complicate the talent pipeline: many nursing and medical school students have been left to finish the current semester using simulations and videos due to the COVID-19 pandemic. This means that students are unable to get the hands-on hospital experience they require as a result of the shortage of personal protective equipment that would keep them safe. How medical education is delivered going forward remains a question mark.

Education: Orlando is consistently ranked among the country’s leaders in education. In 2019, 90% of the city’s residents had acquired at least a high-school diploma while 37% held a secondary degree. The area’s education system also benefits from the city’s overall diversity.

COVID-19 shifted the landscape in the first half of 2020 and how the new environment looks going forward remains to be seen.

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Top grades: With an abundance of good schools, Orlando is primed for continued educational success It is often said that education benefits from a plurality of ideas – from diverse people lending their unique perspectives to classroom discussion and debate. This axiom is borne out in Orlando, which is both a diverse city and a solid performer in education compared to other cities in Orange County, the state of Florida, and the United States as a whole.

In 2019, 90% of Orlando residents were highschool graduates and 37% went on to obtain at least a bachelor’s degree. Only Conway, Lake Hart and Belle Isle have better high-school graduation rates (94%, 94% and 95%, respectively), and only Conway and Bell Isle have more residents with bachelor’s degrees (38% and 44%, respectively). However, Orlando edges out the state of Florida and the United States as a whole in both categories: Florida and the United States both posted 88% high-school graduation rates in 2019, and that same year 29% of Florida residents held bachelor’s degrees compared to 32% across the country. As for the diversity that undergirds these education outcomes, of residents holding a high-school diploma or GED, 21.2% are white, 31.9% are black, 31% are American Indian, 27.2% are Hispanic, 17.4% are native Hawaiian, and 14.4% are Asian. Of the bachelor’s degree holders 90 | Invest: Orlando 2020 | EDUCATION

in Orlando, 58% are Asian, 41.9% are white, 38.4% are native Hawaiian, 27.4% are Hispanic, 21.4% are black, and 14.3% are American Indian.

As this educated population might suggest, there is no shortage of good schools in Orlando. In fact, Orlando was ranked the second-best college town in the entire country, according to a 2019 study by WalletHub. Only Austin, Texas, edged Orlando out overall, but Orlando was No. 1 in the midsize city category. Orlando was also in first place among Florida cities. Thirty-one data points were used to establish the rankings, including cost of living, quality of higher education and crime rates. Of the 400 U.S. cities included in the study, Orlando was 73rd for affordability, third for social environment, and 91st for academic and economic opportunities. A major factor contributing to Orlando’s high rank is the presence of excellent institutions of higher education like Valencia College, Rollins College, and the University of Central Florida (UCF).

In 2020, however, the education sector experienced a new challenge with COVID-19, likely altering the education landscape for good. Within weeks of the pandemic reaching U.S. shores, schools across the country were forced to shut down and teachers and ( )

EDUCATION INTERVIEW

Incubator UCF sets the stage for high-growth technology companies to impact the community

Rob Panepinto Director of Innovation Districts Strategy & Partnerships– University of Central Florida What is the role of the UCF business incubation program?

UCF has been doing business incubation for 20 years, both close to locations where the university has a footprint but also other locations across Central Florida, such as Daytona Beach and Winter Springs. The concept of the Innovation Districts was developed by Dr. Thad Seymour, who identified the issues that exist in our community related to wages and diversification and the role a research-driven university can play in advancing communities. UCF graduates more engineers than most universities in the country and we want to create jobs for our students leaving the university. We wanted to recraft the role the university plays in early-stage entrepreneurial economic development.

The goal of the incubators near our existing hubs, such as Research Park near our main campus, and in the Downtown area and our new campus, and Lake Nona near our medical school is to focus on high-growth technology companies that can scale and create high growth in our community. At Lake Nona, it is largely about healthcare and life sciences.

At Research Park, the incubator focuses on defenserelated industries such as simulation, photonics, AI, and cybersecurity, while in Downtown it is more focused on digital media, smart city technology, hospitality tech, and education.

How do these innovation districts help enhance the student learning and career development process?

As a public university, we do have a communitybuilding responsibility. We are an opportunity for students or faculty who potentially have intellectual property that can be developed. We are doing more joint programming with the faculty. UCF has one of the Top 20 entrepreneur programs in the country so

we’re using faculty to speak to the students and serve as mentors.

What are the main challenges in the work you’re doing right now?

We are revamping a lot of the programming, which demands a lot of work and time. We are dramatically expanding our mentorship program and we need to be more strategic with the way we match mentors with companies. Funding for these projects is always a challenge, especially as a public university.

We are grateful that local authorities are supportive but to continue expansion we need to continually look to expand our resources. The main challenge is whether we can move fast enough in such a dynamic environment. www.capitalanalyticsassociates.com

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Future-proof Creative problem-solving and critical thinking are integral elements of Rollins College’s interdisciplinary curriculum

Grant Cornwell President – Rollins College kind to earn accreditation from AACSB International, which is the gold standard for business education.

It teaches students how to apply business skills and entrepreneurial thinking and action to tackle social and environmental problems around the world.

What academic programs are seeing the most demand, and to what do you attribute that demand?

Overall, we’re seeing increasing demand for our future-proof brand of liberal arts education. Our past two classes have been among the largest in our nearly 130-year history, and employers continue to demand 21st century skills like creative problem solving, collaborative teamwork and critical thinking, which is precisely the kind of expertise our students develop through our interdisciplinary curriculum. In terms of majors, our most popular programs include biology, communication studies, psychology and our three undergraduate business degrees: business management, international business, and social entrepreneurship. That last one, social entrepreneurship, is one of our fastestgrowing majors, and it was the first program of its 92 | Invest: Orlando 2020 | EDUCATION

How is the population growth in Orlando reflected at Rollins College?

First and foremost, the tremendous population and economic growth in Orlando represents incredible opportunity for our students and graduates. Orlando has ranked among the nation’s fastest-growing job markets for several consecutive years, and publications like Forbes have ranked our hometown among the Top 10 cities in the nation for jobs. At Rollins, we’re preparing graduates who are not only uniquely prepared to thrive in this dynamic economy right way but are also ready to help Orlando reach even greater heights through lifelong leadership.

Second, Orlando’s growth is providing our students more and more opportunities to put their ideas to work in the world. Today’s employers demand college graduates who have experience applying their knowledge and skills in real-world settings. Every semester, our students gain professional experience through internships at some of the world’s most innovative companies and organizations right here in Central Florida—from ALDI and NASA to Universal and The Walt Disney Co. Rollins’ also boasts some of the best community-engagement programs and initiatives that you’ll find at any college anywhere in the country. Every single day, our students partner with local and national organizations to create positive change in our community. In the process, they not only learn the importance of engaged citizenship but also develop experience that will give them a competitive advantage in the job market.

EDUCATION OVERVIEW

( ) students quickly adapted to a new reality: distance learning. Some schools that were already positioned online had an advantage in the transition, while others needed to adapt and overcome. By early June, schools remained closed and there was little indication of when students and teachers would return to physical facilities. What became clear, however, is that online education was likely to expand, even after the pandemic passes, as educational institutions recognized the efficiencies and advantages of delivering at least some education through this modality.

Higher education As one of the very top college towns in the country, Orlando is home to some exceptionally good schools.

The quality of Orlando’s colleges and universities is assessed annually by the state according to factors that include the percentage of graduates who are employed or continuing their education, cost to students, the median wages of alumni one year post-graduation, four-year graduation rates, bachelor’s and graduate degrees awarded in areas of strategic emphasis and the academic performance of the freshman class. The rankings established by these and other factors are used by the state to determine the distribution of performance funding among public institutions of higher education throughout the state. For the 2019-2020 academic year, UCF was ranked fourth, with a score of 88 points out of 100. This score earned UCF $77.7 million of the $560 million in available funding.

UCF is a public university and one of the nation’s largest. As of November 2019, the university had a total enrollment of 68,571 students, taught by 2,596 professors and supported by 13,719 employees. In 2020, UCF embarks on a new chapter in its history, with a new president at the helm, in the wake of several recent controversies. Alexander Cartwright assumed the role of president on April 13, 2020, after the resignation of former President Dale Whittaker in February 2019 amid a state investigation into the school’s construction spending, and after he’d been on the job only eight months. Provost Elizabeth Dooley also resigned in April 2020 after remaining on paid administrative leave since January of the same year while she was also investigated. Finally, two faculty were fired in early 2020 (and a third was reprimanded) amid allegations of a student fraudulently obtaining a Ph.D. Cartwright is no stranger to successfully steering a university through periods of controversy. He served as chancellor of the University of Missouri-Columbia after his predecessor resigned over a backlash related to the treatment of the school’s black students. Cartwright stepped into the

The COVID-19 pandemic posed real challenges for higher education, including how to conduct labs that normally would be held in person.

breach and helped lead the school down the road to recovery from wilting admissions numbers.

The Orlando region is home to several other large and prestigious public and private universities. Leading the way is Rollins College, which U.S. News ranked No. 1 in the 2020 edition of Best Colleges, Regional Universities South. The private college, Florida’s first when it opened its doors in 1885, offers around 30 undergraduate programs, including Latin American studies, arts and computer sciences. It also offers master’s programs in a number of areas. Valencia College is another large public institution right in Orlando, with 47,841 students enrolled as of November 2019. Valencia offers associate’s and bachelor’s degree programs, as well as shortterm certificate programs, taught by 2,078 professors.

Seminole State College of Florida and Lake-Sumter State College are also nearby, in Sanford and Leesburg, respectively. Seminole State College is on the larger side with UCF and Valencia, and has a student body of 29,879, whereas Lake-Sumter is somewhat more intimate with 5,200 students. Both schools offer a wide variety of associate’s and bachelor’s degree programs, as well as certificates, with Lake-Sumter offering a particularly rich selection of 17 certificate programs focused on aligning with workforce needs and facilitating employment.

Full Sail University is a private university located in nearby Winter Park. Full Sail enrolled 4,899 students in 2019, in undergraduate and graduate programs offering specialties that include art and design; business, film and TV; games, media and communications; music and recording; sports; web and technology. www.capitalanalyticsassociates.com

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EDUCATION OVERVIEW

Tom Slagle CEO – Rasmussen College

We have been an online leader in education for almost 20 years, so we know how to educate students in an online environment. It is not always simple to incorporate the proper content, curriculum, experience and assessment criteria on a digital platform, but fortunately, we have a lot of experience in that field. Also, we have seen that individuals displaced by the current environment want to build on their knowledge and competencies to better prepare themselves for the current and future workforce. We made the decision to support our communities by providing our eRasmussen Professional Certificates portfolio at no cost.

However, as any student or anyone else who is keeping up with the growing student debt crisis is well aware, a quality education is very expensive. Consequently, the excellent schools in and around Orlando tend to be quite expensive. Of the institutions, UCF is the most expensive at $6,368 per academic year. Lake-Sumter is next at $3,232, then Seminole State College at $3,131, and finally Valencia with a cost of $3,092 per year. Full Sail, as a private university, comes with the far bigger price tag of $14,250 each academic year.

These high tuition costs help contribute to the fact that student loan debt is rising faster in Florida than anywhere else in the country. To break it down, total student loan debt in Florida rose from $32.3 billion in the third quarter of 2008 to $89.4 billion in 2018, which amounts to a 177% increase. When narrowed to the city level, Orlando saw its student loan debt explode by 198%, the biggest increase among cities in the country.

Alleviating student debt is a major focus in America at present, and it has been one of the issues at the core of the 2020 presidential campaign. Schools themselves are beginning to take steps to reduce their students’ financial burdens, too. For example, Valencia College chose to participate in the White House Student Loan Debt Challenge, which emphasizes the duty that institutions of higher education have to help borrowers fully understand their options when it comes to repaying their student loans and avoiding default, such as taking advantage of income-based repayment. The state legislature also added $25.3 million to the Bright Futures scholarship program in 2019 on top of what was originally estimated, since Bright Futures had far higher rates of participation than anticipated. The total funding for the program last year came out to $545.3 94 | Invest: Orlando 2020 | EDUCATION

The Orlando area is home to many well-known and regarded higher education institutions such as Full Sail University.

CONSTRUCTION EDUCATION OVERVIEW

million, which will go toward covering some or all of recipients’ tuition, and even paying for their textbooks.

Workforce preparation In general, the end of obtaining an education is getting a good job. However, the education itself is not always enough to provide students with the skills that can make them attractive to employers. To bridge the gap, sometimes it is necessary for students to receive additional workforce education or training. This is understood by community leaders and educational institutions in Orlando, which is why they are spearheading efforts to ensure that students receive this workforce education and are thereby granted access to rewarding and lucrative careers. For example, UCF has joined a national, three-year program with the express purpose of helping students transition from their college educations into their real-world careers. The program, Bridging the Gap from Education to Employment, has a special focus on first-generation college students and low-income individuals. UCF and other participating institutions will receive a $2.4-million grant under the program, and 50 employers nationwide will work with UCF and the other schools in the program to provide workforce preparation workshops and provide insight into the employer’s perspective on what students need to work on to prepare themselves for employment.

Of course, this kind of real world-focused preparation should begin before students are about to graduate college., and in Orlando, it does. Orange County Public Schools (OCPS) offers several innovative initiatives that bring K-12 students and businesses together to augment the curriculum with content that will broaden students’ knowledge and prepare them for meaningful careers.

For example, Northrop Grumman established the Wekiva High School Laser Photonics Career Academy and the Laser Systems High School Involvement Partnership Program to help set up students for advanced manufacturing careers. Aerospace giant Lockheed Martin also provides funding, volunteers, and other resources to students in the area in an effort to stoke their interest and enhance their skill in STEM areas of study. Orlando is also home to the first engineering and mathematics intermediary school in the country, Discovery Intermediate, where fifthgrade students can begin enrolling in college and career prep courses in design and modeling, automation and robotics, energy and the environment, and flight and space. There is also BRIDG, a high-tech manufacturing research facility for smart sensors, imagers and other advanced devices, where students can work with researchers and scientists to develop new sensor

Garry Jones President Full Sail University

How does Full Sail leverage technology to better serve its students?

Technology originally created for entertainment purposes is being used today across every imaginable industry. For example, virtual reality is a great tool in the creation of titles for entertainment and education, and now it’s being used in medicine, architectural design, military applications and many other sectors. Other technologies such as augmented reality, programming and coding, information technology and cybersecurity are also contemporary avenues for which we are educating, and these technologies are emerging as significant factors in every industry as well. At Full Sail, we strongly believe in project-based learning, so we have built tech-based lab facilities across our campus to complement more than 100 recording studios, soundstages and computer labs in a perennial commitment to empower our students with the latest tech gear and equipment so that they are well-prepared to join the workforce in their chosen fields. From Full Sail’s Simulation Lab where students are crafting and testing simulation experiences to our Fabrication Lab, Smart Lab and User Experience (UX) Lab, students have the opportunity to build, create and explore while problem-solving for 2020 and beyond.

How does Full Sail impact the entertainment, media, arts and technology industries?

Full Sail’s graduates, curricula and campus provide a positive, significant impact. Our graduates provide an impressive talent pipeline that feeds not only Orlandobased businesses, but the entire United States and international entities as well. An illustration of this pipeline is a relationship between Full Sail University and WWE within which, since 2012, an educational partnership entails NXT live productions/network broadcasts from our campus. During each of these weekly events, approximately 40 current students learn via hands-on roles behind the scenes in everything from creating graphics and audio packages to live production. www.capitalanalyticsassociates.com

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Georgia Lorenz President Seminole State College of Florida

How is Seminole State attracting and retaining talent in Orlando?

Research has shown that the better education ecosystem a region has, the more likely they are to attract new businesses and retain the businesses that are already in the area. Seminole State continues to work closely with Seminole County Public Schools to create pathways for our students throughout their school careers and into higher education. We are doing this through our College Readiness, Career Pathways, Dual Enrollment and Honors Articulation programs to educate the future leaders and innovators of our society from kindergarten through college. We want to continue to be a strong partner in that education ecosystem, and we are always trying to attract new investments and business to Orlando. As the population and the business community grow, we will need more professionals in a number of industries. We are making sure we provide the talent to these new and emerging areas to help with the social and economic infrastructure of Central Florida.

How does Seminole State contribute to the Orlando community?

There are many adults in the workforce who have started college but never completed their degree, and that is one of the community challenges we are helping to tackle. We are looking to implement a better way of helping them to achieve that degree. The Florida College System has committed to engage in Gov. DeSantis’ “Last Mile College Completion Program” to help students who left college with 12 or fewer credit hours remaining to complete their first degree. At Seminole State, we are focusing on capturing that adult population and helping them complete their degree.

In addition to our existing DirectConnect™ partnership with UCF, we have a new partnership with UF Online (University of Florida) so associate degree graduates from Seminole State can pursue their bachelor’s degree, and with Complete Florida which enables those with some college to finish their education.

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Workforce training programs can help students gain the skills needed to meet the demands of today’s employers.

technologies. Finally, the renowned private school Montverde Academy fosters workforce preparation in the areas of engineering and robotics, and attracts students internationally. This intense focus on and collaboration with local businesses throughout Orlando public and private schools sets it apart from other cities across the country and ensures that local children are fully prepared for the workforce by the time they join it.

Local for-profit and nonprofit organizations are also providing support to workforce preparation for local students. As just a couple of notable examples, the YMCA of Central Florida received a $25,000 grant from Bank of America Charitable Foundation to prepare young people for college and future job opportunities.

The grant will help to fund the YMCA Teen Achievers program, which works to increase college enrollment and career awareness among disadvantaged youth.

The Duke Energy Foundation provided $1.7 million in educational and workforce development grants in 2017, which was then doubled by matching funds from the State of Florida School District Education Foundation.

Emphasis on trades Given the skyrocketing cost of tuition at traditional four-year colleges and universities, many students have begun to think twice about pursuing this path and are instead turning to training and certification programs that will set them up for lucrative careers in

EDUCATION OVERVIEW

the trades. For students in Orange County cities like Orlando, this alternative path is even easier to pursue.

At the Orange Technical College (OTC), students can pursue a certification for a fraction of the cost of a university education, and can begin working in a fraction of the time it takes to obtain a degree. OTC has five campuses across the county that offer 58 different programs, including 3D animation, welding, and web development. OTC programs cost between $2,000 and $3,500, but programs can be as inexpensive as $131 and as much as $7,000. These certificates enable students to find jobs in trades or professions that pay between $40,000 and $80,000 per year, and often after as little as one year of training.

Colleges and universities are also addressing the increased demand for workforce training in the trades. Florida Technical College is among those. The institution has been training students since its founding in 1982, in particular in specialized business fields, and offers flexible class schedules. Reflecting demand, the school, said President James Michael Burkett, is enjoying unprecedented growth. “We support people who want to acquire technical job skills that can get them into the job market more quickly. That is one of our main advantages. Our locations in Central Florida have seen unprecedented growth, particularly in our hospitality program because many of the positions in these fields require the technical skills we help students

acquire, rather than a traditional four-year degree.

Another big advantage for the school is our Spanish language vocational and technical programs. This program has allowed us to assist the Spanish-speaking population that has migrated to Central Florida over the last few years.”

Valencia College also opened a new Center for Accelerated Training (CAT) in 2019, where students can receive training and industry certifications on a condensed timeline, instead of pursuing a traditional four-year degree. CAT students obtain skills that are explicitly in demand by local businesses and industries, ensuring employment and a good salary after graduation. This is actually the third CAT facility opened at Valencia, following the success of the first two facilities. Valencia also offers special construction training programs to prison inmates to ensure that they have marketable skills and a means of supporting themselves upon their release. The program has already trained more than 300 inmates, 70% of whom found full-time construction jobs after getting out of jail.

Furthermore, schools recognize the need for cooperation and many are partnering with the private sector, both to train an appropriate workforce and to help ensure jobs for graduates. In some cases, there is a direct relationship between the university and the corporation. Such is the case of AdventHealth University. The university, as its name implies, focuses on the health sector, with parent AdventHealth operating a leading faith-based, nonprofit health system across the United States. “As a university, being tied to a world-class, progressive and innovative organization has been critical, in large part because future healthcare trends continue to be an important element in the country’s economy.

Especially in Florida, when you think about the aging population that is increasing, the need for modern technology, genomics, the portability of access to healthcare information, and the need for well-trained professionals to change how people experience healthcare,” said AdventHealth University President Edwin Hernández. He added that the university is “responding to the trends in healthcare by developing programs that are in great demand. We have robust programs for therapy-related professions, such as occupational therapy and physical therapy, at both the undergraduate and graduate levels. Other areas that are seeing significant demand include physician assistant and nurse practitioner. Those are a direct response to the demand for primary care professionals and providers. www.capitalanalyticsassociates.com

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EDUCATION OVERVIEW

K-12 In addition to being one of the nation’s top college towns, Orlando is also home to some of the best schools in central Florida. In fact, the Top 4 public high schools in the region are in Orange County, according to an online ranking by Niche that analyzed state test scores, college readiness, graduation rates, SAT/ACT scores and teacher quality. Of all public high schools in Orange County, Seminole, Lake, and Volusia counties, the Top 4 were Orlando Science Middle/High Charter School, Winter Park High School, Timber Creek High School and Olympia High School. These schools also appeared high on the list of the top performing high schools in terms of student SAT scores. Orlando Science High School was No. 1 (total average score of 1210), followed in the Top 10 by Crooms Academy of Information Technology (1136), Osceola County School of Arts (1115), Paul J. Hagerty High School (1110), Lake County Virtual School (1105), Winter Park High School (1072), Oviedo High School (1069), Windermere High School (1057), Timber Creek High School (1049), Legacy Charter High School (1046) and William R. Boone High School (1045).

Another metric that shows the quality of schools in the Orlando area is the number of students that each sends to the Ivy League (or the country’s top nonIvy schools). Orlando’s Lake Highland Preparatory School, for instance, is a small private institution with fewer than 800 students across grades 7-12, yet it sent more of its graduates to Harvard, Princeton and MIT from 2015-2017 than any other school in Central Florida (two to Harvard, five to Princeton). Olympia High School, Freedom High School, Cypress Creek High School and Bishop Moore Catholic High School in Orlando tied for 94th in Florida, each sending one student to one of the schools analyzed in 2019. Timber Creek High School and Dr. Phillips High School tied for 48th, each with one student matriculating to MIT and another to Harvard.

Of course, any school is only as great as its teachers, and attracting and retaining high-quality educators has been a persistent problem for schools across the country for years. Florida’s Education Commissioner is seeking to ameliorate this long-standing difficulty with hiring and retaining great teachers. Florida has hundreds of unfilled teaching positions, and the need is particularly acute in science, English and math.

So far, the state has pushed through $480 million to give raises of $9,000 each to high-performing teachers across Florida. The Florida Department of Education also received a $16-million grant to recruit teachers to the schools in the most dire need of talent and keep them there. Another initiative involves educating the 98 | Invest: Orlando 2020 | EDUCATION

educators. Lockheed Martin has established a program whereby it pays for teachers to obtain a Master’s of Education in K-8 Mathematics and Science. Ninetyeight Orange County teachers have been selected for the program, the first 20 of which graduated in 2019.

Another important issue facing schools across America, and of which Florida received a particularly forceful reminder in 2018, is student safety. A school safety bill that was passed unanimously by the Florida House of Representatives in its first session since the mass shooting at Marjory Stoneman Douglas High School in Parkland, Florida, will allow law enforcement to investigate and possibly press charges against people who intentionally submit false tips through Florida’s see-something-say-something app. It also strengthens the mechanism by which school superintendents can have their pay reduced or eliminated if their district is found to be in violation of post-Parkland safety laws that require additional infrastructure, more reporting to state agencies and armed security on every campus.

Finally, the bill establishes clear rules for the arrest of children under 10.

Looking ahead The future looks bright for Orlando’s schools – and their students. The city continues to rank near or at the top of the state and country for the quality of its K-12 and postsecondary institutions. The government is also pairing with businesses and community leaders to ensure that students receive a comprehensive education that includes workforce preparation, thereby helping to bridge the gap between the classroom and a career.

Orlando is also remaining on the cutting edge as more students are choosing to pursue alternatives to the traditional four-year college degree, such as acquiring a trade or certification. Whatever the type of school a student attends, the Florida government is intent on keeping them safe, with a new bill passing the House and moving to the Senate in March 2020.

Of course, as with every other facet of life in the first half of 2020, education was impacted by the COVID-19 outbreak. All public and private schools in Orange County remained closed as of early June and were set to stay closed for the remainder of the academic year, with students remaining at home while teachers do their best to instruct them remotely. This has required the provision of laptops and physical learning materials by the schools, though some students already use computers to complete their schoolwork, so the transition was easier for them. State tests have also been canceled. One thing is certain: how education is delivered has changed, and likely for good.

Tourism, Arts & Culture: Anchored on its privileged location and friendly climate, not to mention its numerous theme parks, Orlando has enjoyed a lucrative tourism industry. But tourism is also a sector that is susceptible to economic downturns, a fact highlighted by the steep impact from COVID-19. There is one unique element that could help the industry rebound: most of the tourists to Orlando are homegrown.

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Magic: The home of the Magic Kingdom continues to cast a spell on visitors, and a rebound from COVID-19 is likely Tourism in Orlando immediately brings to mind Mickey Mouse and the Magic Kingdom, but over the last decade or so, the region has expanded its tourism offering to cater to a wider variety of tastes and budgets. Beyond Disney and its main theme park competitor, Universal Orlando, there is a rich tapestry of arts, entertainment and sports.

In its most recent study, Oxford Economics found that Orlando’s 75 million visitors in 2018 contributed over $75 billion in economic impact for central Florida, which is a 6.4% increase over 2017. Tourism is also the region’s largest employer, providing 463,000 jobs and supporting 41% of the workforce. The industry also supports others indirectly, including an $11.9 billion business sales tax contribution to finance, insurance and real estate and a $16.1 billion business sales tax to recreation and entertainment. From 2014 to 2018, a 20% growth in visits has generated an almost 25% rise in spending, supporting a 13% expansion in employment in Central Florida.

While this is normally a lucrative sector for Orlando, it is also susceptible to economic swings. As such, the segment was one of the first to fall victim to the COVID-19 pandemic, with the cruise industry in 100 | Invest: Orlando 2020 | TOURISM, ARTS & CULTURE

particular suffering. For the week ending April 11, the number of initial applicants for unemployment in Florida shot up half a million, from just 6,463 in the week ending March 7, a higher level than Georgia, Pennsylvania, Texas and even New York. How long it takes the industry to bounce back is anyone’s guess, but the fact that the typical tourist to Orlando originates domestically bodes well for the sector in the longer term.

Performance Since 2013, Orlando has enjoyed the honor of being the nation’s “Most Visited Tourist Destination.”

In November, Orlando was voted the most visitorfriendly city in Florida based on its friendliness, cleanliness and local efforts to make visitors feel at home. According to Visit Orlando, there are over 450 hotels and resorts in the region that span a wide variety of options, from condos to Walt Disney resorts.

The area boasts 10 main theme parks, including four owned by Walt Disney and two by Universal, spanning more than 1,800 acres.

The tourism trickle-down effect means economic impact spreads to almost all sectors in Orlando. ( )

TOURISM, ARTS & CULTURE INTERVIEW

75 million Orlando scores a record number of visitors, underlining its position as the No. 1 tourist destination in America

George Aguel President & CEO – Visit Orlando What were some highlights or major milestones for Visit Orlando over the last year?

Our most significant highlight was the achievement of a new national record for the number of visitors.

We hit a record 75 million visitors, which continues to define us as the No. 1 destination in the United States.

We also celebrate the growth of our tourism industry, whether it’s new theme park attractions, hotels or the expansion of the Orange County Convention Center.

Orlando has the second-highest number of hotel rooms of anywhere in the United States, and 2019 and 2020 will be the biggest two-year period for hotel inventory growth in Orlando in over two decades. We remain the theme park capital of the world, and we were able to trademark that designation because of how significant it was.

What are some unique opportunities for the tourism industry in Orlando?

The experiences that everyone can have here — from having a safari experience to going to theme parks and other areas that represent many close and up-front personal experiences. Those are the kind of things that make Orlando unique. If you want to know what the future looks like and discover things you’ve never imagined, you can find that in one of our theme parks.

The uniqueness of being able to do so much in one place, in one period of time, is rare. Visitors know that no matter when they come, they will always find new activities to experience.

In what ways does Visit Orlando leverage technology to ensure innovation and relevancy?

We have adopted strong technology for our visitors and consumers, primarily through our website’s easy access. We have also migrated heavily into a mobilefirst environment. Our goal there is to make it as

easy as possible for people to do business in Orlando.

We make sure the ideal technology is available for our visitors. We practice most of our marketing and promotional efforts online to help our visitors plan their trips to Orlando, which we have done with the launch of Orlando Virtual Tours on our site. This technology gives potential visitors the opportunity to test drive Orlando with virtual 360 degree experiences, such as riding Orlando’s tallest roller coaster, ziplining over alligators or being on Main Street in front of Cinderella Castle at Disney’s Magic Kingdom Park.

We have also had a significant role in ensuring and expanding communication through our social media sites. Those are several examples of how we leverage technology to create awareness of what we do. www.capitalanalyticsassociates.com

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Greg Allowe President & Managing Partner The Delaney Hotel

What are the advantages of being a boutique hotel in a tourist mecca?

As a developer, investor and operator, our cost to develop or operate is less expensive than paying a franchise fee or a royalty to one of the brands. There is tons of flexibility in the design element of the property, whereas a brand restricts options, and the traveling consumer is more interested in originality and authenticity. Those are the key elements behind wanting to be a boutique hotel.

On the site selection side, we recognize that Orlando is a major metropolitan city, mainly anchored by tourism. We did not want to compete in the tourist market, however. Our model looks for ancillary sources of business and identified that the area south of Downtown Orlando lacked available rooms and had an abundance of demand. We built ourselves around the secondary market of medical tourism. We are steps away from Orlando Health Orlando Regional Medical Center, a 1,200-bed facility with close to 14,000 employees. We usually accommodate family members of patients, traveling resident physicians or related suppliers, to name a few. Our client base also includes attorneys and banking professionals doing business in Downtown Orlando.

What trends have you identified on the development side of the business?

The name of the game is building conversions because of the originality you obtain from a design element. All the hotels are uniquely different when you think more about building uniqueness rather than a brand. Even the big brands are trying to mimic this trend as they are threatened by independent operators such as us. It is part of the natural dynamics of an evolving market.

They now include smaller, boutique brands within their brand.

Our intention is to bring more Delaney Hotels to central Florida, initially. We are looking at communities such as Tampa, Winter Park and Jacksonville.

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( ) Accommodation and food services are among the most common employment sectors for those living in Orlando, providing 10.9% of jobs. Arts, entertainment and recreation provides 5.35% of jobs. Another large employer that is buoyed by tourism is real estate and rental and leasing, which provides 3.53% of jobs.

Among the winners of the industry trickle-down effect are sharing economy applications such as Airbnb, which allow people to generate some extra revenue based on the high demand for a bed in the city.

Kissimmee is ranked second in Airbnb’s hot spots across the United States, with Orlando coming in ninth. In 2018, Orange County homeowners earned $40 million through stays by 338,000 guests – the third-highest in Florida after Miami-Dade and Osceola counties. And rather than competing with hotels, there seems to be enough business to go around. Despite this, in 2019, Airbnb spent around $1.25 million to prevent local authorities from regulating Airbnb rental properties. In February, a bill that would preempt the ability of cities to regulate short-term rentals was sent to the Senate floor by the Senate Commerce and Tourism Committee.

One of the reasons for the increasing demand for accommodation is the expansion of Orlando’s tourism horizon. Long gone are the days when Orlando was just a destination for a holiday. Thanks to the expansion of the Orange County Convention Center, it is a place for MICE: business, incentives, conferences and exhibitions. The $605 million expansion plan is set to break ground in the fall, with a completion date in 2023.

Upgrades will include an additional 60,000 square feet of meeting space, an 80,000-square-foot ballroom and another 200,000 square feet of flexible space at the North/South Concourse. The Convention Center provides an estimated $3 billion in economic impact to the Central Florida region annually with almost 200 events, which attract over 1.5 million attendees.

Outside of the COVID-19 crisis, MICE tourism has a strong positive economic impact on Orlando’s economy.

The 75 million visitors to the region in 2018 marked a 20% increase since 2014. Around 11.2% of these visitors came for business purposes in 2018, 6.2 million of whom were attending a convention or group meeting. That is a 9.5% increase in MICE tourists since 2014.

Interestingly, domestic tourists far outnumber international tourists, which totaled just 6.5 million in 2018. This means that, while Orlando’s tourism industry is sure to suffer from the fallout of a lack of international travel, added to travel agency Thomas Cook’s bankruptcy in late 2019, the impact could be

TOURISM, ARTS & CULTURE OVERVIEW

mitigated by an increase in domestic travel. In 2018, Thomas Cook brought more than 270,000 passengers through Orlando International Airport (MCO), equating to an estimated local impact of $132 million.

But having said that, it remains that over 90% of those 75 million visitors were domestic travelers. It is highly likely that domestic travel will recover well before international travel in the aftermath of the COVID-19 pandemic, which puts Orlando into a solid position for a rebound.

The region’s connectivity plays a significant role in this. MCO is Florida’s busiest airport and is undergoing a $4.2 billion capital improvement project that will increase capacity with a $2.8 billion South Terminal and 19 new gates for 27 aircraft. Although airline travel may be severely hampered for the near future, Orlando is also located at the apex of major highways.

Its privileged position off the I-95 means the city is just a 17-hour drive from Washington, D.C. Hotels Pre-COVID-19, the Orlando hotel market was on fire.

At the end of 2019, the greater metro Orlando region, including Orange, Osceola, and Seminole counties,

was home to 486 hotels with a total of 127,809 guestrooms, which is a 1.9% increase on the year.

2020 was expected to bring 15 new hotels and over 4,700 new rooms, with the two largest projects being the 561-room JW Mariott and the 2,050-room Endless Summer Resort Dockside built by Universal.

Within the hotel market, there are six categories: economy, midscale, upper midscale, upscale, upper upscale and luxury. In Orange County, the majority of hotel inventory is within the upscale and upperupscale classes, with just over 6,300 rooms belonging to the luxury class and 12,343 rooms in the midscale category. Going forward, the largest increase will be in economy rooms and some hotel rooms are even being converted into residential developments, as can be seen with the 515-room Red Lion Hotel near Walt Disney World in Kissimmee. In January, real estate firm T2 Capital Management bought the property to convert into the Maingate Village, a 339-unit apartment complex that also incorporates 28,000 square feet of retail space, swimming pools and tennis courts at a total cost of $40 million. The goal is to market these rental apartments to Disney World’s 70,000 employees, starting at a rate of $725 per month.

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TOURISM, ARTS & CULTURE OVERVIEW

Overall, Orlando’s hospitality industry had a strong year in 2019 but due to the impact of headwinds that included a later Easter, which affected Spring Break, and adverse weather around Hurricane Dorian, occupancy rates actually dropped by 2.1% on the year to 76.1%. However, the losses were mitigated by the fact that rates increased by 1.1% to reach $126.95 per night.

Despite the drop in occupancy rates almost across the board in the metro Orlando area, Orlando North and Central bucked the trend, increasing by 0.1% and 1.6%, respectively. Leisure occupancy contracted more than business occupancy in 2019 and Orange County suffered slightly more than the Florida or national averages, which is mainly a result of high hotel room penetration. That being said, convention rates surged to $188.70, up 2.2% on the year and Orange County’s rates were up over the national average, reaching $134.52.

Arts and culture Orlando is a hub for creativity, with the single most common associate’s degree awarded in the region in the liberal arts, accounting for over 80% of these degrees in 2017. Over 19% of postsecondary certificates awarded in Orlando are in restaurant and food services management and hotel administration and management. Other common postsecondary degrees include culinary arts, baking and cinematography, meaning the region lends itself to being an arts, culture and gastronomy hub.

Orlando’s arts have philanthropic fans. The current 50,000-square-foot Orlando Museum of Art sits in Loch Haven Park and was built in 1974 but in early 2019, billionaire Joe Lewis pledged an investment

of $10 million in a new Orlando Museum of Art if his donation could be matched with $30 million in fundraising for a $40 million building in Lake Nona.

Additionally, January saw the opening of the Harriett’s Orlando Ballet Centre, a $12.5 million, 38,000-squarefoot facility that will serve as a venue for various events.

While social distancing measures have all but canceled social events, Orlando’s arts scene is adapting by taking its product offering online. In May, the Playwrights’ Round Table showed Connected Voices II, a collection of short plays, on its Facebook page.

Cinematique Theater in Daytona Beach is streaming its content online and the Orlando Fringe will share either live or prerecorded performances in a virtual format.

Events and festivals In mid-October of this year, Downtown Orlando was expected to be taken over by the 2020 edition of Immerse, a collection of 1,000 artists from 140 institutions that perform interactive shows. But it is unclear whether the event will go ahead amid COVID-19 concerns, a predicament that many events find themselves in.

Given social distancing, events and festivals in Orlando are unlikely to experience the same buzz as they have in previous years. 2019 saw a host of highprofile events at the Orange County Convention Center, including the International Association of Amusement Theme Parks and Attractions (IAAPA) expo, which attracted more than 1,100 companies from around the world.

Amid the COVID-19 outbreak, the Convention ( )

TOURISM, ARTS & CULTURE INTERVIEW

Primary driver Orange County Convention Center delivers economic value in a variety of ways

Mark Tester Executive Director – Orange County Convention Center How does the Orange County Convention Center help to drive the region’s economy?

One of our primary missions is to drive jobs and income to this region, and support as many economic sectors as possible. The strength of our medical market and our strong health partnerships in the area go hand and glove with our ability to host medical meetings. Those brands, known at the national and international levels, help foster innovation and research efforts while placing us on the map as a great destination for medical conventions and meetings. The average attendee spends $2,567 locally when visiting. It shows we are an economic driver, supporting 1,200 businesses and over 29,000 people working in our industry.

How is the center bolstering its value offer to cater to population interests?

We are making a point of looking at our capital improvement projects to ensure our ballrooms, common areas and renovated meeting space look their best. With the pandemic’s impact on our business, we have all hands on deck to hit the gas pedal on cleanliness and disinfection protocols. We are also looking to implement our North-South Building expansion plan, a $605-billion project that is close to hitting 30-percent design. The project is divided into two parts. The Convention Way Grand Concourse expansion includes an additional 60,000 square feet of meeting space and an 80,000-square-foot ballroom along with a new entry to the North-South Building along Convention Way. It will provide the capacity to cater to different markets that the buildings cannot accommodate now.

The Multipurpose Venue brings an additional 200,000 square feet of contiguous exhibit space in the South Building. It will incorporate connectivity between the North and South concourses. This venue will grant us

the ability to welcome extremely large general sessions, plenary sessions of 10,000 to 20,000 people in one place.

How is the pandemic shifting the landscape for conventions and events?

Sanitation measures in convention centers will change and will remain for the foreseeable future. We are one of the first and largest convention centers to commit to participation in the Global Biorisk Advisory Council (GBAC) STAR accreditation process. There will be a series of rigorous guidelines on both the sanitation and social distancing fronts, among others, and we are moving forward on that. The GBAC STAR was created by the International Sanitary Supply Association, the premier sanitation association in the world. Experts in those fields are developing these guidelines, which will evolve as the world changes. www.capitalanalyticsassociates.com

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TOURISM, ARTS & CULTURE OVERVIEW

Gabriel Preisser Executive & Artistic Director – Opera Orlando

As part of our strategic plan, we do what we call our Salon Series, which are private in-home concerts throughout Orlando’s satellite communities. These satellite communities, such as Windermere, Winter Park, Apopka, Celebration and Winter Garden, are among the unique elements of the city of Orlando.

Since it is hard to get everybody to come to Downtown to see our productions, we reach out to these communities as much as possible.

( ) Center has undoubtedly suffered. In the face of the highly contagious virus, large public events were the first casualties. As of March, 13 major conventions had rescheduled, including the MegaCon Orlando show that was originally scheduled for April.

Theme parks According to the TEA Global Attractions Attendance Report, Disney’s Orlando theme parks welcomed over 62.5 million visitors in 2019 – almost 66% of Orlando’s market share. But competition has emerged in the form of Universal Orlando, with NBCUniversal CEO Steve Burke commenting that Disney has been given “a free ride” in terms of a lack of competition prior to the arrival of its competitor.

With this in mind, 2019 was a year of expansion for both parks in an attempt to take advantage of the untapped market potential. At the end of 2018, Universal announced an ambitious investment program that could total as much as $23.4 billion. As part of the plan, in 2019, Universal Orlando opened Universal Epic Universe. Universal also announced at the end of 2019 that it would build a new world headquarters for its creative department in Orlando, creating 150 jobs with average salaries of $95,000.

Not to be outdone, Disney’s Hollywood Studios launched its Star Wars: Galaxy’s Edge theme park.

Epic Universe is to be expanded further, with a Nintendo theme park to open in 2023. That project will create an economic impact of $11 billion in the region.

Other Disney additions in 2019 included Mickey and Minnie’s Runaway Railway, Disney Skyliner, Lightning McQueen’s Racing Academy and The NBA Experience.

In 2019, Seaworld launched Sesame Street Land and Aquatic Orlando launched the KareKare Curl thrill water slide.

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But alongside huge gains are huge losses, as theme parks became one of the largest casualties of COVID-19 measures. As the theme parks across Orlando shuttered, some came under harsh criticism for their actions. Disney, for example, came under fire for furloughing staff to save costs while retaining executive bonus schemes.

By June, many of the theme parks were already getting ready to reopen, a good sign for the industry.

But just like life changed after the 9/11 terrorist attacks, certain health and safety protocols introduced during this crisis are unlikely to go away. In March, Wynn Resorts announced it was introducing thermal cameras at all its entrances and Disney will phase out fingerprint scanners to be replaced by facial recognition technology. There is likely to be a new, more stringent approach to hygiene and automation will become ever more common.

Sports The Greater Orlando Sports Commission (GO Sports) has hosted over 1,200 sporting events with a total economic impact of over $1.4 billion. GO Sports has a primary role in attracting events such as WWE Wrestlemania, Monster Jam and the FIFA World Cup to the area. In one week of January alone, Central Florida hosted three major sporting events – the NFL Pro Bowl, the PGA Merchandise Show and the Racquet & Paddle Sports Show – which generated an estimated $160 million in local economic impact.

After the success of the Pro Bowl, Orange County leaders approved the use of $2.7 million in tourist funding to bid on the 2021 event.

Orlando is home to a host of major league sports, including the Orlando City Major League Soccer team, the Orlando Magic NBA basketball team and the

CONSTRUCTION TOURISM OVERVIEW

Orlando Solar Bears East Coast Hockey team. The city also has a whole list of sporting events in the pipeline for the next few years, including the 2022 Special Olympics USA Games and Monster Jam World Finals.

The city is working toward hosting one of the 2026 FIFA World Cup games, which could generate up to $1 billion in economic impact for the region. It is no wonder then that the city commissioners approved raising the county’s sports incentive fund to $4 million from $2 million to invest in these initiatives.

Cruises No mention of tourism in South and Central Florida is complete without a nod to the cruise industry.

Port Canaveral in neighboring Brevard County is one of Central Florida’s greatest generators of cruise industry tourism revenues. It is ranked as the world’s second-busiest cruise port and is working to become the busiest with an ambitious expansion project. This includes a $260-million investment in two new cruise terminals and an $85-million renovation plan for three existing terminals. The upgrades will allow the port to accommodate mega cruise ships and will be home to Carnival’s new Mardi Gras cruise ship, which carries up to 6,500 passengers.

The Mardi Gras was scheduled to begin sailing in 2020, now an unlikely possibility. Even prior to the COVID-19 outbreak, there were construction delays on the vessel, and in March the global cruise industry came to a standstill. Like all industries after the pandemic, the face of the cruise industry is likely to be dramatically altered, especially given fatal outbreaks of the virus on board ships on several occasions. It is possible that further cruises for 2020 may be canceled and the delivery of many new ships will be delayed.

Looking ahead Anchored on its privileged location and friendly climate, the tourism industry has been a lucrative one for Orlando. But the COVID-19 pandemic demonstrated how vulnerable the region’s economy is. While a complete recovery is unlikely in 2020, tourism leaders in Orlando are already taking steps to adapt to the new normality and make preparations for an increase in demand after the pandemic is brought under control. Tourism is likely to become more regional, with flights canceled in favor of road trips.

There is no doubt that Orlando will recover from the economic shock of the COVID-19 outbreak. But it is yet unclear how long the recovery will take and how the industry will look in the aftermath.

Pia Brenan General Manager Park Plaza Hotel

What are the advantages of being in Winter Park?

Winter Park is financially very strong. Not only is there a lot of money in the city from the people who live here but there are also a number of financial institutions established here. They like to have the Winter Park name because it is a stamp of approval in the eyes of local customers. These companies bring more people into town and ultimately much our clientele is made up of financial professionals who are coming to visit their companies. Separately, a big part of the client base are the families of students who attend college here. There are also a lot of weddings in this area because of Winter Park’s many venues that are perfect for an occasion like that. All these factors bring business to our hotel.

What changes have you seen in the hotel sector?

We have seen a change in our business. Airbnb has cut into our business operations significantly because we are a fairly highly priced hotel and consist of only 28 rooms. Airbnb is a tough competitor because they are usually priced lower and they are not as highly regulated as hotels. For example, we have regular visits from the health department, we are consistently inspected, we have to show that we are fumigating when needed, that we have all the proper safety precautions, that we have all our licenses, that we pay our taxes, and more. Airbnb doesn’t have the oversight of inspection, which is a large expense for us.

What challenges do you face and how do you deal with them?

To help navigate some of our challenges, we work very closely with the Chamber of Commerce and the local government of Winter Park. The increase in the number of hotels is going to be a challenge in the future. We really strive to work collaboratively with these hotels because we are a different niche than most of them in that we are a historic boutique hotel. This means that we attract a certain clientele. We can work with the other hotels in a way that is mutually beneficial. www.capitalanalyticsassociates.com

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Market voices: Hotels

Mete Baykal

General Manager Orlando Airport Marriott Lakeside

Our competitive edge boils down to service. Marriott hotels have done a wonderful job throughout the years to build up a service brand that resonates with our customers, keeping its standards at an all-time high. The lion’s share of the repeat guests who make up our client base come back due to the quality of our service. In a highly competitive market such as Orlando, there is little margin to build up and consolidate customer loyalty among the extensive array of choices and options available, including the constant wave of new properties that come online year after year, including resort properties.

The Crowne Plaza Orlando Downtown updated its offerings for business travelers in 2018. We created the Plaza Workspace, which is an integrated concept that takes business to the next level with the technology and speed business travelers need when they are miles away from the office. We have several meeting and event rooms and a talented team of meeting and event experts on staff.

Siegbert Kindl

General Manager Crowne Plaza Orlando Downtown

Simone Kuska-Villanueva Executive Director The Florida Hotel & Conference Center

The No. 1 reason people want to stay in the hotel is the mall, but they also want to have the availability to visit Universal, Disney and the other parks. We also have 50,000 square feet of meeting space. We are able to host different groups for local and national conferences. Most groups typically need 100 to 300 rooms a night. The group market is very strong, and we focus on that, not just tourism, because it’s important to be diverse. We host many small corporations and national associations for conferences, many of them involved in technology, aviation and military reunions.

Because we are a boutique hotel, people want that personal experience and genuine connections. Here at the Grand Bohemian Orlando we encourage our guests to indulge in every artful moment, wander and discover our hotel filled with art and an amazing food experience. We do quality things that matter to our guests.

Justin Williams

General Manager Grand Bohemian Hotel 108 | Invest: Orlando 2020 | TOURISM. ARTS & CULTURE

Orlando

EXECUTIVE GUIDE

Legal Services:

Orlando’s legal sector is building on its strong foundation through consolidation and a focus on an equitable and diverse bar. While the region’s legal segment is attracting the business and corporate citizenship of major firms from across the state and country, it also has not been immune to the COVID-19 pandemic that has had a devastating impact across all business segments.

R

elevance through reinvention is a fitting description of Orlando’s legal market. An era of consolidation in addition to new technologies and opportunities have conspired to change the face of the legal services industry in the region. The evidence is in the continued interest of large national and regional firms and legal service providers to break into the Orlando market.

Firms in the region are also staying up to date with social progress throughout the legal industry, particularly when it comes to diversity and inclusion initiatives that ensure that Orlando’s community of legal professionals accurately reflects the broader community of which they are a part, as well as maintaining the valuable diversity of opinions and outlooks that is essential for the provision of quality legal services.

Of course, there are other ways in which the country and world are changing that are far more challenging to contend with. First, of course, is the ongoing COVID-19 pandemic and global lockdown of nonessential businesses. Legal professional services have not escaped the economic and employment ramifications of the outbreak, with local firms already stating plans to reduce staff (including attorneys) due to an anticipated downtick in business and revenue. The court system has also been forced to postpone many types of proceedings indefinitely, but its remote handling of some matters may be a sign of things to come. www.capitalanalyticsassociates.com

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Consolidation: The legal sector is consolidating and the outlook remains strong despite the COVID-19 fallout

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History Orlando has a long-standing tradition of high-caliber legal services and education, but this history has not been without turbulence. Consider, for instance, the history of the Florida A&M University (FAMU) College of Law. The FAMU College of Law was originally established by the state board of control in 1949, in Tallahassee, with its inaugural 1L (first-year law student) class starting in 1951 and graduating in 1954. However, the law school was only open for a little over a decade before the state legislature voted to shut it down and instead establish a law school at Florida State University, leading to the Board of Regents barring FAMU College of Law from accepting its incoming 1966 class, making the 2L and 3L classes the last to graduate from the school. Thus, for over 30 years, there was no law school at FAMU. Then, in 2000, a pair of bills was introduced to the state legislature calling for the establishment of law schools at FAMU and Florida International University, both of which were passed and signed into law by Gov. Jeb Bush. The revamped FAMU College of Law, now located in Orlando, accepted its first 1L class in the fall of 2002, and was accredited by the American Bar Association in 2004. FAMU College of Law is now going strong at its cutting-edge facilities in Downtown Orlando, where it moved in 2006, apparently unphased by the 30-year hiatus.

Orlando is also home to some very old, very prestigious law firms. Maguire, Voorhis & Wells has the distinction of being Orlando’s oldest law firm, having been established in 1918. It also has the distinction of being targeted for acquisition by Florida’s largest firm, Holland & Knight, which also happened to have been founded in 1918.

The merger blends two firms with similar histories and cultures, while greatly augmenting Holland & Knight’s intellectual property, construction litigation and bankruptcy practices, and giving Maguire’s attorney’s access to international markets and Holland & Knight’s robust marketing arm. The combined firm in Orlando will also replace Holland & Knight’s Miami office as its largest in Florida – the Orlando practice will consist of 101 attorneys versus 97 in Miami, while Washington, D.C., remains Holland & Knight’s largest footprint, at 130 lawyers. The new Orlando office will also be stiff

EXECUTIVE GUIDE: LEGAL SERVICES ANALYSIS

competition for the firm that has erstwhile enjoyed the title of the city’s largest: Lowndes, Drosdick, Doster, Kantor & Reed, which employs 94 lawyers in Orlando.

Landscape Of course, the large firm formed by the merger of Maguire and Holland & Knight is only one of more than 300 law firms in Orlando’s robust and mature market. The five largest firms in Orlando employ 425 lawyers locally, 192 of which are partners. These firms — Lowndes, Drosdick, Doster, Kantor & Reed; Cole, Scott & Kissane PA; Shuts & Bowen LLP; GrayRobinson PA; and Morgan & Morgan — offer services in such broad areas as personal injury, malpractice, real estate, finance, medical marijuana law, cybersecurity, litigation and professional liability defense.

Another key transaction actually took place outside Orlando when local firm GrayRobinson PA acquired Washington, D.C.-based lobbying firm Eris Group in February 2019. The acquisition of Eris Group boosted GrayRobinson’s government affairs and lobbying practice group to 26 lawyers between Florida and D.C., and added the additional value of sophisticated industry knowledge and daily contact with policymakers that will significantly boost the firm’s profile in the lobbying field.

There are good reasons for firms wanting to be in the Orlando area, and chief among them is growth.

Solid infrastructure and an entrepreneurial spirit add to its attractiveness, said Jennifer Williams, Orlando office managing partner at Ernst & Young (EY), in an interview with Invest:. “Some of the advantages to being in Orlando are its great infrastructure due to the tourism trade, its diverse economy, the simulation and

technology industries, a world-class airport and having the benefit of investing in good public transportation systems. The city of Orlando is growing just like EY is growing as a firm, so we are able to take advantage of all of that growth. This is a very entrepreneurial city, and it has multiple resources like the National Entrepreneur Center and business support programs at the University of Central Florida and Rollins College. All of that aligns with our focus on entrepreneurship. These are the kinds of companies that eventually are going to need a global financial services firm thanks to evolving technology and the scale of global operations.”

Perhaps the most salient feature of Orlando’s legal sector in the first half of 2020 was its reaction to the COVID-19 pandemic and the corresponding lockdowns and stay-at-home orders issued by governors across the country. As work stalled or ground to a complete halt across a variety of industries, one of the most substantial impacts of COVID-19 was the spike in unemployment across the country. In Florida, unemployment jumped to 4.3%, with 120,000 people out of work since February 2020, when the state’s unemployment rate was 2.8%.

Legal professionals haven’t escaped this rash of joblessness unscathed, with many attorneys and other law firm staff laid off. Greenspoon Marder, for example, let 40 employees and five lawyers go as a direct result of revenue dips caused by the pandemic and ensuing lockdown.

The court system in the Orlando area is also rolling back services in an effort to limit the spread of COVID-19.

The Ninth Judicial Circuit of Florida issued an order suspending all jury trials as the pandemic continued to rage. Also postponed were all hearings related to criminal and civil traffic infractions in Orange ( )

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EXECUTIVE GUIDE: LEGAL INTERVIEW

The firm went through a rebranding process in 2018, what has been the impact of that rebranding?

We will always be Lowndes, Drosdick, Doster, Kantor & Reed, but more often than not we are referred to and recognized as Lowndes. Doing business as Lowndes reflects our clients’ and community’s perception, and updating the logo within our brand was a way to reflect and embody the spirit of our growth and evolution over our 50-year history. We are humbly grateful to our clients and community that have played a key role in helping us reach that milestone. Most importantly, even with the brand refresh, we’re still who we have always been, a firm wholeheartedly committed to serving our clients and community, helping them succeed and prosper.

Deep bench William Dymond CEO & President Lowndes, Drosdick, Doster, Kantor & Reed, P.A.

What are some of the unique solutions Lowndes offers in its practice areas?

We have a deep bench of attorneys, many of whom have been with the firm for decades and they are dedicated to understanding our clients’ businesses, helping them mitigate risks and addressing their challenges with practical, cost-effective solutions. We believe that client service is our hallmark, and that means taking ownership of our clients’ issues while providing the objective analysis all good business demands.

What areas are seeing the most demand in Orlando?

Tourism will always create high demand. We have a national hospitality practice that continues to thrive. As the population grows and ages, we’re seeing increased demand for multifamily housing and senior housing.

Technology and its relationship to all industries such as manufacturing automation and the ability to reduce production costs and predict sales, the use of artificial intelligence to review banking transactions and detect anomalies, the use of robotics in medical procedures and space exploration ... all of this has created a need for special expertise in the legal industry. Frankly, though, the law is still about relationships. Relationships with clients, colleagues and the community will remain paramount at Lowndes.

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You are also a leader at LIFT Orlando. How is the group helping to break the cycle of poverty?

LIFT has been a remarkable and tremendously rewarding undertaking for all involved. Parts of the west side of Orlando have been locked in a cycle of poverty for generations. Governments in our country have waged a 60-year war on poverty but have not been able to solve the challenges of the inner city. At LIFT, we wanted to take the community’s investment in Camping World Stadium and use it as a leverage point to change the lives of the people who live in its shadow. We pulled together a group of business leaders and decided up front that this was going to be business-led as opposed to governmentled, and that we would work hand in hand with the residents of the West Lakes neighborhood. We’ll partner with the government, we’ll partner with not-for-profits, but we engaged business people who bring their business acumen and who can roll up their sleeves and do what they do every day: find solutions.

There are many symptoms and a lot of outcomes that are a problem in struggling neighborhoods, and if you only treat the symptoms, you will never bring about real change in people’s lives. You have to take a holistic approach to fix housing, health and wellness, education, and you have to provide jobs and economic activity.

And you have to do all four of those things at the same time. We have employed a collective impact model.

Today, we have $100 million worth of projects either completed, under construction, or planned and funded in the West Lakes neighborhood area. In addition, we’re trying to bring employers into the marketplace so that people from the community have access to entry-level jobs and can begin careers. We are working with both the public school, Orange Center Elementary School, and a charter school, Legends Academy, to build an educational pipeline in the community.

EXECUTIVE GUIDE: LEGAL SERVICES ANALYSIS

While the pandemic has had a devastating impact, a number of opportunities have emerged, including the legal sector.

( ) and Osceola counties, as well as all child support enforcement hearings before an enforcement hearing officer. The court was able to hold some hearings via teleconferencing, and any matter that couldn’t be handled remotely was postponed or rescheduled.

Only those seeking injunctions for their own personal protection, or anyone who had otherwise received advance permission from the chief judge could access the region’s courthouses. Interestingly, the move to remote courts could have a lasting impact after the pandemic passes, with many lawyers going on record to attest to the efficiency of the process.

Taxes and Opportunity Zones The Tax Cuts and Jobs Act (TCJA), one of the Trump administration’s most significant policy accomplishments, is now over 2 years old. In that time, the TCJA has begun to have salient impacts on the country’s citizens and businesses, as well as on the federal government itself. Starting at the top, the TCJA’s reduction of the corporate tax rate, from 35% to 21%, has substantially reduced the government’s revenue from corporate income tax, with such revenues down approximately 40%, or one of the largest year-

over-year reductions outside of a recession. Obviously, a reduction in corporate income tax revenue is an expected outcome of a reduction in corporate income tax rates, but the decrease has far surpassed projected losses by almost $40 billion. Economists worry that if this level of shortfall continues, it could further expand the United States’ already worrisome deficit.

Another impact of the TCJA was a marked increase in business investment in Q4 2017, but economists question whether increased investment into 2018 was precipitated primarily by the TCJA, or simply by aggregate pro-investment factors prevailing at the time. Moreover, by 2019, it appeared that investment in business was actually tapering off, despite projections offered by proponents of the TCJA at the time of its passing. As for the effects of the TCJA on individual families, the jury is still out. While most economists believe that the average family has experienced a decrease in its tax liability, others point out that the savings are nowhere near what was promised by the TCJA’s proponents, and that the growing deficit caused by the loss of business income tax revenue will eventually lead to families having to pay more in other areas and, thus, render the tax savings a wash. All this ( ) www.capitalanalyticsassociates.com

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Market voices: Focus areas Alexander Clem Managing Partner Morgan & Morgan

Ronnie Bitman Managing Partner Bitman O’Brien & Morat

We are trying to get good people. That’s the long and the short of it. Our business really has four pillars: Are we doing excellent work? Are the clients happy? Is our staff happy? Are we profitable?

Those are the four things that I look at when recruiting people, and expanding our locations, practice areas and personnel.

We are trying to add people and we are trying to add practice areas.

We want to be a general services firm that’s essentially a onestop shop. We are not in some practice areas; for example, we don’t do criminal defense, we don’t do anything with taxes, but we want to be able to otherwise provide all-encompassing services throughout the state.

We’ve set up a platform and we have lawyers distributed throughout the state, so we are pretty nimble and we can do anything in the state of Florida.

We want to be able to have diversity in practice areas where someone can come to us for an employment case, a breach of contract case or a real estate matter.

Our different practice areas cater to the diversity of the businesses and people here in Central Florida. In our Business Trial Group, we have over 20 lawyers doing nothing but commercial litigation, and as the business community grows, the appetite has grown for a lawyer or law firm that will take the risk with the client.

Many firms that bill by the hour get paid a fee whether they win, lose or draw. The client can lose the case but the lawyers still get their hourly fees. It was very cutting-edge when John Morgan decided to do it this way several years ago.

Michele Digilo-Benkian Managing Partner Legal Counsel PA

Most attorneys out there have never owned a business before and are very quick to jump in and give advice on situations that they are not familiar with. In regard to my legal experience and my entrepreneurship, I actually take those experiences and use them to counsel my clients. I also know the dividing lines between a business decision and a legal decision and deciding which one a client should make without blurring the lines. I think that’s important in properly assisting our clients. If they want counsel on a business decision or if it’s truly legal then I’m able to determine that line and let them know the legality with regard to a specific point.

Deborah Moskowitz Partner & Shareholder Quintairos, Preito, Wood & Boyer PA

We have been positioning the firm to deal with the upcoming issues related to the cannabis industry. As cannabis has been legalized to some level, we’ve had to get up to speed quickly to advise clients on the potential impact on their employee policies. We have a cannabis practice group based in our Chicago office, which is essentially looking at the subject from a federal perspective. This is definitely a big issue and a big business here, so we have clients who need to have that advice. Firm-wide, we are making sure that we are effectively providing counsel to the businesses we represent in that space.

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EXECUTIVE GUIDE: LEGAL SERVICES ANALYSIS

( ) is still mostly speculation and opinion based on some of the earliest data available. Two and a half years is still extremely young in the context of legislation, and more time is needed before a definitive sentence can be passed on the TCJA. EY’s Williams said the impact from the Act on clients has been mixed. “From a macro level, tax reform had a mixed effect. On one side it sought to attract new investments into the United States in the form of people or assets. On the other side it aims to discourage corporations from eroding the tax base of their U.S. operations through large tax-deductible payments and locating people and assets outside of the United States. Orlando companies are dealing with both of these effects. In addition, clients are surprised at the added complexity due to tax reform and the need to have broad access to many data points on a realtime basis in order to meet the increased compliance demand. Combining the changing global and domestic tax legislative landscape with increased talent and technology needs, clients are starting to reimagine the tax function through the use of digital technologies such as RPA, data analytics and even managed service offerings from professional firms.”

A corollary of the TCJA in Florida is the influx of many ultra-wealthy individuals into cities like Orlando from erstwhile bastions of the rich like New York City and

Michael Okaty Office Managing Partner Foley & Lardner LLP

Are you seeing a comeback of the corporate consolidation trend in the Orlando market?

Yes, I think that’s been happening for the last several years. We are seeing both consolidation of strategic owners who are trying to grow and consolidate, but also financial buyers, private equity, and family offices that are trying to consolidate what would otherwise be fragmented industries into larger companies with more economies of scale.

We live in a middle-market city so more often than not we would tend to be on the sell side, representing a solid, family-owned, multidecade, multigenerational business that’s gotten to the point where the founders are looking for liquidity and there are buyers, both

The TCJA imposes a $10,000 cap on taxpayers’ state and local tax deductions Los Angeles. Simply put, these individuals are fleeing states with the highest income taxes, like New York and California, for the refuge of Florida’s 0% income tax.

Florida has long had a 0% income tax, while these other states have always had heavy tax burdens, leading to the question: why now? The answer is that the TCJA imposes a $10,000 cap on taxpayers’ state and local tax (SALT) deductions on their federal taxable income, beginning in fiscal year 2018. This makes Florida’s 0% income tax and 2% property tax even more attractive to highincome residents of places like California, which has

strategic and financial, out there looking to roll up.

Home-grown businesses based here over the last few years tend to be on the sell side.

What are the fastest areas of growth for the firm in the Orlando market?

Healthcare M&A, both in consolidation as well as provider practices and primary care groups. There’s also the area of medical office buildings, and we do a lot of work in the senior housing area. Healthcare and healthcare M&A is a really hot, growing area. Private equity and venture capital, regardless of the industry, are also moving.

What challenges are the industries that you represent facing in the area?

The industries are facing challenges like capital availability. Florida and Central Florida haven’t always been viewed as super-sophisticated business climates, so there is a need to show private equity and venture capital investors from out of state that Florida is a hotbed for successful companies that need their investment. www.capitalanalyticsassociates.com

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13.3% state income tax that they can no longer deduct. within a designated Opportunity Zone. Investors However, Florida’s tax benefits can only be enjoyed by receive capital gains tax deferment on holdings of five genuine permanent residents of the state, a status that and seven years, and reduced tax liability at the time the wealthy are obtaining through the purchase of payment is eventually made. If the investment is held luxury properties in some of the state’s most exclusive for 10 or more years, no capital gains tax is owed on the neighborhoods. Other requirements for permanent appreciation of capital gains – so the longer you hold residence include spending at your investment the better. least 180 days out of the year at Generally, investors are excit. their Florida residence, obtaining ed about the Opportunity Zones a Florida driver’s license, and and see them as a great way to satisfying some additional legal spark investment in traditionally requirements. neglected areas around the counThe TCJA also included an try. However, it is important to be opportunity for real estate inaware of another perspective that vestment and the revitalization has taken shape when it comes of many historically underdevelto Opportunity Zones. While oped parts of America’s major investors are mostly excited about metro areas through what the the program, and the owners of Patrick Howell TCJA calls Opportunity Zones. small businesses located within Becker These specially designated areas the zones anticipate increased attract private investment by offering capital gains revenue for their businesses as the area around them tax deferment to investors in real estate development gradually improves, there are some activists and projects within the zone who then hold their residents within the Opportunity Zones that worry investment for a set amount of time. Ninety percent of about gentrification. Over time, as the Opportunity the money invested in the project must be spent on an Zones have their desired effect and investment pours already operating business, equipment or real estate into erstwhile economically disadvantaged areas, ( )

Opportunity Zones... have not taken off in Central Florida as much as they have in South Florida.

Kate Saft Partner Greenspoon Marder

How has COVID-19 impacted your practice?

We have seen consistent delays and pauses in our financing and real estate deals as a result of the COVID-19 pandemic. Some clients are anxious to complete as many pending transactions as possible given the uncertainly of what is ahead. Others are seeing deals in which they can be competitive in light of the interest rate drop. We do anticipate some logistical issues, particularly in-person closings, which is why online notarizations are helpful.

Whch practices areas are seeing the most growth?

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areas of real estate litigation. We have seen demand for those practices increase, not only throughout Central Florida but across the United States. We are pleased to be able to meet the needs and demands of our clients in these areas. We are consistently looking to expand our real estate, timeshare, corporate and litigation practice areas, not only in Orlando but on a national level, as well.

What legislation or regulatory matters are you keeping an eye on?

We are closely monitoring two Telephone Consumer Protection Act (TCPA) petitions pending in the Supreme Court that challenge the constitutionality of the TCPA. In particular, there is a petition pending that questions whether a single call necessarily results in injury that is concrete for the purposes of Article 3 standing, and a petition that questions whether the restrictions on using an automated telephone dialing system or an artificial, pre-recorded voice violate the First Amendment. We are very interested in the results of these petitions and how they will affect our hospitality clients.

Market voices: Tech growth Ava Doppelt Shareholder Allen, Dyer, Doppelt + Gilchrist PA - Orlando

Traditionally, there are a lot of electronicrelated matters, not just software but also hardware. In this area, we’ve represented companies related to laser technology, the simulation business, which crosses over to a lot of business areas because it is useful in defense but also in gaming, for example.

We also do a lot of work with people in the nutritional supplement area, not much patent work but other business activities. Because of where we are, there are still many inventions in the agricultural area, which might be surprising but we work with farmers and processors of food products to make sure that their goods can be harvested and kept safe and distributed.

Russell Goldberg Partner Withum

Central Florida is seeing economic growth across various industry sectors. Construction is among the industries seeing high demand in Orlando due to the city’s growth. There is strong demand in the hospitality and healthcare industries as well. We are also working closely with tech companies and providing them advice on the market. We are also seeing an increase in companies moving headquarters to Orlando, which brings higher-paying jobs to the area and increases our client base.

Armando Payas Managing Partner Payas, Payas & Payas LLP

We would love to see judges and courthouses move further toward the digital space. We waste incredible amounts of time moving from one court house to another to attend hearings.

We can see significant improvement and efficiency with court systems using virtual platforms. Discovery-type hearings can be handled quite quickly and would benefit tremendously from such a transition. We are seeing doctors and other kinds of special witnesses appear via video in the courtroom. We can see more depositions being done by Zoom. The silver lining is we can spend more quality family time and reconnect with what is important.

Johanna Clark Co-Managing Shareholder – Orlando Office Carlton Fields

Technology is a growing sector of Orlando’s economy and our attorneys are handling a lot of tech-related client needs. The gaming company Electronic Arts has announced plans to move its headquarters from Maitland to Downtown Orlando’s Creative Village. On top of that, with universities like Full Sail and the University of Central Florida in the area, there is an influx of great gaming-related talent coming to Orlando. To meet client needs, we have a team of attorneys who specialize in electronic gaming. Our attorneys help our tech-based clients with cybersecurity, as well as licensing, labor and employment, mergers, or any type of technology issue. They help companies and techbased entrepreneurs navigate this developing aspect of the law. The same is true with the growing construction industry in the region. The influx of new businesses is impacting our practice areas.

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( ) it is likely that property values and rents will increase, potentially pricing out existing residents, and even potentially some businesses. This is an important matter of social justice that must be balanced alongside the obvious benefits of Opportunity Zones, perhaps by ensuring that a certain amount of what is developed within the zones is affordable housing. This issue, and how it is addressed, will likely continue to evolve over time. “Opportunity Zones are a hot topic in South Florida and we have been assisting our clients in that area. However, they have not taken off in Central Florida as much as they have in South Florida. It is a great way to redevelop areas in need of redevelopment and do good for the communities. We hope that it expands and becomes as popular here as it is in South Florida,” said Patrick Howell, Orlando office managing shareholder at Becker.

Diversity and inclusion The law firm of the 21st century has fully embraced a commitment to diversity and inclusion in the workplace, among other facets of life. In addition to the fact that the equitable treatment of all people regardless of any individual characteristic is, rightly, one of the core principles of the law, diversity also improves the quality of legal work by increasing the

Jennifer Williams Managing Partner – Orlando Office Ernst & Young

What is EY doing to build a better working world?

There are two main ways that we’re focusing on building a better working world. This year, we had a Day of Understanding, and EY joined the CEO Action for Diversity & Inclusion. This organization is one of the largest CEO-driven committees focused on advancing diversity and inclusion. The goal was for us to participate in individual or group conversations as a catalyst for, essentially, understanding one another. The other area, which is bigger, is our EY Ripples. This is a not-for-profit extension of EY Consulting, where we make consulting services accessible and affordable in order to impact entrepreneurs in low-income communities. All projects are scoped, managed and overseen with the same rigor 118 | Invest: Orlando 2020 | EXECUTIVE GUIDE: LEGAL SERVICES

Orlando is home to some of the oldest and largest firms in the state of Florida.

as would be applied to any client engagement. We also build a better working world around our daily work construct and by putting more meaning into what we’re doing. We have had a long-standing commitment, with both impact and actions, to cultivating a diverse and inclusive culture, and we know we have more to do to drive further, faster and with more sustainable change.

How are is the firm driving change, specifically?

A few of the meaningful actions we are taking to drive strategic change in our firm, in the communities where we work, and through policy include evaluating internal talent and business processes to advance equity across race; investing $3 million in organizations committed to fighting social injustices, including inappropriate use of force in law enforcement, incarceration of black males, healthcare disparities and economic inequalities in the black community; and contributing a total of $4 million collectively to four Historically Black Colleges and Universities to help increase the number of black and African Americans in professional services.

EXECUTIVE GUIDE: LEGAL SERVICES ANALYSIS

number of perspectives and backgrounds within a firm, which in turn leads to more creative solutions that might not be pursued in a more homogenous environment. Ultimately, this means more business for the firm, as clients appreciate both the more creative and higher quality work, and the firm’s apparent commitment to progressive social values; a classic example of doing well by doing good.

Of course, there are also more formal expressions of the legal community’s devotion to a more diverse body of legal practitioners. The website of any of the leading Orlando law firms, for example, has a page discussing their various diversity and inclusion initiatives, such as diverse hiring and community outreach. In addition to the motives of increased profit and genuine progressivism, these initiatives are to a significant extent motivated by the Strategic Plan of the Florida Bar. The Strategic Plan’s diversity component was conceived during the 2004 Diversity in the Legal Profession Symposium, which had the goal of developing guidance to shepherd the legal professionals of Florida toward creating a bar that more accurately reflected Florida’s population. The envisioned guidance would serve the Florida Bar itself, law schools throughout the state, practicing lawyers, and those responsible for selecting the

Francis Sheppard Managing Partner Rumberger, Kirk & Caldwell

Where have you seen the most growth in regard to demand for your firm’s services?

The most demand is for our litigation work. We have had an uptick in commercial litigation as well as an increase in labor and employment work. We represent many of the local governmental entities as well. Class action work has also been strong for us because we are handling class actions not just in Orlando, but also elsewhere throughout the country. We have also seen our construction litigation practice become increasingly busy and that has been a big part of our growth. We have diversified our firm into more transactional work, which is a reflection of growth in the local market as well.

What future opportunities does the pandemic open up for the legal sector?

Because of the COVID-19 pandemic, it has been all hands on deck for the firm. We had to act swiftly as this came on so quickly. The transition to working remotely has a couple of sides to it. While most of our lawyers were already well-equipped from the technology side, lawyers can’t work without support staff. We are dependent on them. So while we have successfully made the transition, it wasn’t without its challenges.

The legal sector is learning to do things in a more remote way and I think it expands our opportunities. It gives us the opportunity to be more flexible, which may lead to some cost-effectiveness for clients in instances where we can do things better remotely than we could in the past. I think the courts will also see some changes, which will affect how law is practiced in the future.

Inefficiencies in processes suddenly become more pronounced when you have to do everything remotely.

So the things that we might have been able to tolerate in regard to inefficiencies in the past, suddenly become more noticeable and less tolerable. www.capitalanalyticsassociates.com

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judiciary. The resulting 2004 Diversity in the Legal Profession Final Report and Recommendations to the Board of Governors was the distillation of the important work that was done during the symposium, and is still the primary underlying guidance for the Florida Bar and everyone affiliated with the legal profession in Florida on the subject of diversity and inclusion.

Some of the campaigns that have been inspired by or grown out of the Strategic Plan include the creation of the Committee on Diversity and Inclusion in 2010, the Florida Bar’s hiring of Arnell Bryant-Willis as diversity initiatives manager in 2011, and the hiring of Eugene Pettis as the first African-American president of the Florida Bar in 2013. The latest iteration of the Strategic Plan for 2016-2019 delineated several objectives that emphasize the Bar’s continued commitment to advancing the goal of a more diverse legal profession.

Demand areas Glenn Adams Executive Partner - Orlando Holland & Knight

What are the fastest-growing services or industries in Orlando for business law firms?

We have strong demand for construction. One of our high-profile clients is involved in the I-4 Ultimate Improvement Project. There is a lot of other construction going on in Orlando that goes hand in hand with our clients’ real estate development activities. Healthcare is also an important part of our community, and we serve significant healthcare clients in Orlando as well. We also have a new partner whose specialty is tax credits in new markets. This is an area that continues to be strong locally and within the firm.

What impact has tax reform had on the Orlando area?

Tax reform has been very positive for businesses.

Large corporations are getting more tax benefits due to the reduction in the corporate tax rates. Some clients have requested our advice regarding philanthropy. In other words, they are willing to take some of their tax savings and use those dollars for charitable endeavors.

That was a nice thing that we weren’t expecting to see as part of the tax reform. On the other side, M&A was pretty strong in 2018 and continued to be strong in 2019. It was a good time for organizations that had been on the sidelines in earlier years with respect to M&A activity.

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Looking ahead Orlando’s legal sector has a historic and strong foundation to build on, and has consistently taken advantage of this to develop apace with the cutting edge of the industry. Whether it is ensuring an equitable and diverse bar or attracting the business and corporate citizenship of major firms from across the state and country, Orlando has always remained at the forefront. Of course, diversity and inclusion is a moving target that will require continued attention in the coming years, and in a legal market that continues to consolidate across the board, there will likely be more mergers in Orlando’s future.

The city’s legal professionals will also need to contend with the COVID-19 fallout, including the broad postponement of many cases throughout the court system, adding to an already heavy backlog.

But there are also opportunities. “From the lawyers I have spoken with in the Orlando region, they are still practicing law even in light of COVID-19. Some people are in the office because they have been able to achieve social distancing by having part of their team work at home and some work in the office. Between using technology where it is needed and the fact that most of us communicate with our clients a large percentage of the time over the phone, I don’t feel like we’re missing a beat,” said Edward Milgrim, president of Milgrim Law Group.

Finally, the continually unfolding tax landscape following the passage of the TCJA continues to demand the attention of legal and financial professionals across the country as they adjust to new corporate and individual tax liabilities, as well as the practical implications of Opportunity Zone investment.