Disney’s Orlando Campus Cancellation a Blow to Neighboring Projects

The company cited changing business conditions and new leadership when it announced this month that it wasn’t proceeding with plans for the office space or the relocation of 2,000 employees from California.

In 2021, Disney purchased the nearly 60 acres in the Orlando community known as Lake Nona for about $46 million. It was moving forward with the campus project as recently as March, when it sought city approval for the plan. The company’s plans included 1.8 million square feet of space across eight buildings and three parking garages, according to city records.

It is unclear what Disney will do with the land now that it has canceled the office complex. Lake Nona’s developer, Tavistock Development Co., has the right to buy back the land eventually under a number of different scenarios, and it has the right to match outside offers.

But the land could sit vacant for years before Disney decides what to do with it—a disappointment for the many adjoining commercial and residential projects that were banking on Disney employees moving there.

Disney declined to comment on its future plans for the land at Lake Nona.

Jessi Blakley, a Tavistock vice president, said in a statement: “We have been intentional in curating the selection of organizations, innovators and entrepreneurs that fuel our ecosystem."

The pullout marks the latest flashpoint in a political and legal battle between Florida Gov. Ron DeSantis, who recently announced his candidacy for the White House, and Disney, which also is in the midst of cutting costs.

When Disney announced its Lake Nona investment plans—which included the employee relocation—almost two years ago, it sparked a wave of new residential and multifamily development. Now, its pullout could contribute to a glut of homes in the community.

Construction ramped up after the announcement, with more than 2,100 apartment units delivered, said Lisa McNatt, a director of market analytics based in Orlando for CoStar Group. By comparison, there had only been 750 new units built in the preceding three years.

An additional 1,200 units are in the active construction pipeline, according to CoStar. Single-family home builders also stepped up plans. The vacancy rate for multifamily units has jumped to 16% from 3.9% in the third quarter of 2021, when Disney unveiled its campus project. Inventory has swelled to nearly 8,000 units.

Disney’s 60 acres border the commercial center of Lake Nona, which includes restaurants, the four-star Wave Hotel, and a nearly 280,000-square-foot high-end office building slated to open later this year.

A new Brightline train station which connects to South Florida is set to open this summer and is just a 10-minute drive from the Disney office site.

Lake Nona has also attracted multiple corporate tenants including KPMG, which has a $450 million national training facility and campus there, and the U.S. Tennis Association’s national campus boasting 100 tennis courts. It features a health and life sciences cluster and multiple aerospace companies have taken up residence.

Adding the Disney campus, “would have been a transformational development project for Lake Nona," said McNatt. “It would have resulted in a strong uptick in higher-income jobs that could have benefited the Orlando area at large."

Tavistock Group is a private investment company based in the Bahamas and founded by Joe Lewis, the billionaire owner of the English Premier League soccer team Tottenham Hotspur. The firm is also partnering with Justin Timberlake and Tiger Woods on a 600-acre redevelopment in the village of Wellington, a luxury equestrian community in Palm Beach County.

Tavistock has the option to repurchase Disney’s Lake Nona land seven years from the closing date if Disney doesn’t meet construction milestones, including the completion of 250,000 square feet of interior space, along with a certificate of occupancy, according to public records related to the sale.

Another option to purchase the land would be triggered if Disney doesn’t meet further milestones within 10 years.