"I cannot remember when we have had almost 850,000 sf of inventory and another 450,000 sf coming on line this year--over 1.3 million sf of available space," notes Lyle N. Nelsen, a corporate and industrial specialist at Maitland-based Rebman Properties Inc. "At 300,000 to 400,000 sf average absorption per year, that is over three years of inventory."
The service center/flex market's vacancy level of 11.86% is about the same as last year's 11.4% mark. Nelsen says brokers in the field are telling him leasing activity slowed during the first quarter; prospects for smaller spaces are "very active"; rents are rising; "very little" free rent is being offered by landlords; and several centers are raising the annual rent escalation rate to 4%.
"The challenge in this market is the abundance of inventory," Nelsen says. "With the shortage of developed industrial land, this market could be in real trouble without a strong inventory of spaces." He tells brokers they are "in a prime position to handle leases of all sizes. The Orlando economy is strong. Let's take advantage of it."
Among the larger first-quarter leases were Munters Corp., 16,276 sf at Park South Business Center; ORHF Foundation, 16,000 sf at Southgate East; Four Front Interiors, 13,660 sf at Sunport IV; Curascript Pharmacy, 12,582 sf at Lee Vista Service Center; Rotech Corp., 11,400 sf at Vineland Road; and Starbuck Coffee, 10,500 sf at the Quorum.
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