"Land prices have stabilized nationally, but while the trend is also evident in Central Florida, there is a marked shortage of land where development is currently permitted," Livingston tells GlobeSt.com. "Clearly, higher land prices are imminent."

GlobeSt.com research finds average asking prices for dirt in established metro Orlando industrial parks are $2 per sf in sites such as the 1,350-acre Orlando Airport Industrial Park to $12 per sf in high-profile locations such as the 21-year-old, 1,800-acre MetroWest mixed-use development near Universal Orlando.

Livingston also notes construction costs remain high. "Receding labor and lumber costs caused by a leveling off of major construction activity has been more than offset by high prices for petroleum products," the developer says. "The overall cost is declining, however."

The build-to-suit market has slowed nationally. "This is reflected here in Central Florida as well," Livingston says. "Prospective tenants are more modest in their space requirements and tend to follow their business budget more carefully."

Sophisticated developers are overcoming the economic hurdles and planning for the recovery by providing "cutting-edge technology," Livingston says. "Broadband access and energy availability figure prominently, as do high parking ratios, high clear spans, flat floors, flexibility and increased amenities."

The developer remains upbeat on the national economy. "It is my view that the economy will turn up early next year," he tells GlobeSt.com. And when it does, real estate investment trusts will be in a favorable position again, Livingston feels.

"Reits have shown an excellent total return and beat the market over the last year," he says. "This is an indication of better things to come."

Instant Insights /

Central Florida Running Out of Developable Land

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