A Lake Mary developer and property management firm plans to relocate its headquarters to a trendy neighborhood near downtown Orlando — and build apartments nearby.
Whole Milk LLC — an entity related to Lake Mary-based Atrium Property Group LLC — bought a group of properties totaling 1.2 acres southeast of Bumby Avenue and Church Street on Aug. 4 for $3.7 million, Orange County records show.
The sellers were Lochrane Brothers Investments LLC and T & G Lochrane Investments LLC. Forness Properties' Drew Forness and NAI Realvest's Jeff Bloom were the brokers involved in the land deal.
Adam Wonus, partner at Lake Mary-based property management firm Atrium Management Co., told OBJ he plans to move Atrium into a 10,000-square-foot building at 201 S. Bumby Ave. that will be renovated. The company temporarily will operate out of 211 S. Bumby Ave. while the improvements take place. Atrium has roughly 27 Central Florida employees, according to OBJ research.
The renovations are expected to cost $700,000, start this year and be completed by mid-2022, Wonus said.
The downtown office submarket’s 15.4% average vacancy rate is higher than the Orlando-area average of 14.3%, Cushman & Wakefield (NYSE: CWK) reported. However, the submarket commands an average asking Class A office rental rate of $29.42 per square foot, compared with the Orlando-area average of $27.44.
Meanwhile, Wonus said he also plans to build 27 market-rate apartments on site and currently is seeking city of Orlando approvals. The site currently features the 10,000-square-foot office building slated for renovations, as well as a 2,100-square-foot commercial space and a 1,200-square-foot commercial space, Orange County records show. Some demolition may be required to make way for the new apartments, but nothing has been finalized yet.
Orlando-based Eleven18 Architecture is the apartment project's architect, and Orlando-based Z Development Services is the project's engineer.
Wonus declined to disclose more details about the apartments and construction timeline. The project may cost $5.1 million to build, based on industry standards.
The downtown Orlando apartment submarket is one of the hottest in Central Florida. Currently, Orlando's average monthly apartment rent is $1,514 per unit and its average apartment complex vacancy rate is 5.9% — the lowest since first-quarter 2018, CoStar Group research showed. In fact, roughly 8,000 apartments have been absorbed in the first half of 2021, a record for the region.
Wonus said the site's proximity to downtown Orlando and State Road 408 were factors in the decision to relocate, in addition to the Milk District's nearby restaurants and shops. Meanwhile, Wonus said his employees also wanted to move the office to the trendy neighborhood.
"I've been looking for a new office for a long time, and I wanted to be in the Milk District because that's where we started," Wonus said.
It's the latest investment in the Milk District that is east of downtown Orlando and named after the neighborhood's dairy roots. For example, a new retail business incubator called The Milk District Spot opened in July at 2430 E. Robinson St. Meanwhile, Orlando-based Team Market Group plans to redevelop what's left of the popular Colonial Lanes property at 400 N. Primrose Drive into a mix of uses, including a bowling alley.
The Milk District has seen a bevy of new retail and residential construction projects in recent years because the neighborhood is near downtown, Thornton Park and Baldwin Park, making it attractive for investment, previously said Luke Wickham, senior managing director of investments at Marcus & Millichap who owns properties in the neighborhood but isn't involved in the Atrium deal. Wickham expects to see more retail and residential development around the Milk District. "It's one of the hottest new neighborhoods in Orlando. The secret's out."