At year end 2005, Downtown's 2.81-million-sf class A sector posted positive absorption of 276,142 sf; Southwest Orlando's 2.64-million-sf market came in with 183,421 sf; and Lake Mary/Heathrow recorded class A net absorption of 179,507 sf.

Based on all three classes of space in each of the three submarkets, however, Southwest Orlando came out on top with a total 414,171 sf of net absorption; Maitland Center was next with 325,768 sf among class A, B and C buildings; and Downtown ended on a positive note with 184,535 sf after negative postings of 83,344 sf among class B buildings and negative 8,263 sf in class C structures.

Among the nine key submarkets, net absorption totaled 1.43 million sf in 2005, nearly doubling the 2004 total. Vacancy is down to 13.1%, down from a high of 18% at year end 2000. "As large blocks of 25,000 sf of available space comprise 30% of the available market, tenants continue to negotiate deals for low effective rents, while landlords contend with competitive conditions to acquire those new tenants," says GVA/Advantis executive director Greg Morrison.

The office sleeper for 2006 could be the 3.1-million-sf University-Research Park submarket in east Orange County, predicts Morrison. "It's the submarket to watch" because of recent new leasing activity, the broker says. Morrison notes construction of the Concourse at the Quadrangle is under way, with the first building 89% occupied. Construction on the second and third buildings, totaling 90,000 sf, is expected to start this quarter.

Close to that project is the expected third phase of University Corporate Center, currently planned as a build-to-suit project by Opus South Corp., Morrison says. Lastly, Crescent Resources is preparing to break ground on Four Resource Square, a 151,900-rentable-sf, class A, three-story office building in Research Park.

On the investment side, Maitland outpaced all other submarkets in 2005. Maitland posted nearly $256 million in sales volume and 27.5% of Orlando's total sales volume, Morrison notes. Thirteen class A and B office buildings were sold in this submarket at an average $143 per sf.

"Although interest rates should continue to rise in 2006 and lenders are increasing strictness in their buying requirements, capital gains taxes are at their lowest point in years, so we expected more sellers to come on the market, maintaining Orlando's strong investment activity," Morrison says.