Two major players in growing the region's early-stage startups have a new home in downtown Orlando.
The University of Central Florida Business Program's Downtown Innovation District and startup accelerator Starter Studio on Dec. 1 will move into a 3,579-square-foot space at 130 S. Orange Ave — the ground floor of the 85-year-old Kress Building.
Kress Building Landlord Rob Yeager, president of Sullivan Properties Inc., said the new tenants "gives our city a great opportunity to really watch these companies grow and impact our entire region."
Orlando Business Journal in August reported UCF would not renew its lease for 20,000 square feet of space shared by the innovation district and Starter Studio in Church Street Exchange Building at 101 S. Garland Ave. The two organizations traded that for a two-year lease and a smaller footprint in the core of downtown Orlando.
In addition, the new location offers opportunities to expand their presence in the future.
'In the heart of downtown'
Downtown Orlando is the site of one of three innovation districts operated by UCF, each with a focus on different industry clusters. Early-stage companies can join the innovation districts and get coaching, fundraising help and access to university resources. The Downtown Innovation District focuses on digital media, smart city tech, fintech, education tech and hospitality/tourism tech.
The downtown space gives the Downtown Innovation District a place to hold mentor meetings for member companies and host its First Customer program. The space stood out for a few reasons, said Rob Panepinto, UCF's director of Innovation Districts Strategy and Partnerships and senior strategic adviser of Partnerships and Innovation at UCF. For one, Panepinto said there's "an allure to being in the heart of downtown and for people being able to see the activity taking place as they pass by."
The space also offers a mix of offices, conference space and open space for events. Plus, there are surrounding offices in the building that could be snagged if needed in the future, Panepinto added. “It fits what we need now, but it has some opportunities for growth if we need it.”
When Starter Studio launched as Canvs in 2014, coworking was a major part of the nonprofit's offerings. However, its emphasis in recent years has shifted to its educational programming for tech-focused entrepreneurs. Starter Studio will use a hybrid online and in-person model for much of its programming going forward.
“We set out to expand our programs and de-emphasize the place as the coworking market matured and commercialized,” said Executive Director Lilian Myers. “We are focusing on the mission that was originally intended to fulfill the strategy of being the only non-profit accelerator focused on tech and tech-enabled companies.”
The UCF business incubation program and Starter Studio make sizable contributions to the growth of small businesses in the region. In fact, the business incubation program has supported more than 600 companies that raised $103 million combined in the past 22 years, according to UCF’s website. Plus, the 115-plus companies Starter Studio has supported since 2015 created more than 300 jobs, according to a 2020 study by London-based EY.
In addition, both Starter Studio and the UCF incubator program were among the top startup investors in the state between 2016 and June 2021, according to Atlanta-based Panoramic Ventures' 2021 State of Startups in the Southeast report. StarterStudio was the third-most-active investor among accelerators and incubators with 24 investments. Meanwhile, the UCF Business Incubation Program was third among Florida’s government-backed investors with 30 investments.
Office market stats
The downtown office submarket’s 14.7% average vacancy rate is comparable the Orlando-area average of 14.3%, Cushman & Wakefield (NYSE: CWK) reported. However, Cushman & Wakefield reported 179,048 square feet of negative absorption so far this year in downtown, an indicator of the toll the Covid-19 pandemic took on the Central Business District's office market.
Still, the submarket commands an average asking Class A office rental rate of $29.97 per square foot, more than the Orlando-area average of $28.27.
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