ORLANDO-National economic slowdown or not, metro Orlando’s office leasing and development markets continue to roll. The combination of new companies entering the market and existing tenant expansion is accounting for an unprecedented third-quarter net absorption of 623,804 sf, according to Grubb & Ellis Co.’s Orlando office.

Vacancies are at 9.9%, down from 10.2% in the second quarter. Downtown, which recently added about one million sf of class A product, experienced its largest single quarter net absorption (252,021 sf) in the last decade.

“After 10 years of no new construction of multi-tenant buildings, this strong absorption activity proves that pent-up demand for space in the central business district is high,” Jeffrey S. Sweeney, managing director and executive vice president of Grubb & Ellis’ Southeast division, tells GlobeSt.com.

The southwest Orlando submarket witnessed the highest quarterly net absorption of any submarket with 263,142 sf. Sweeney sees no braking in the local development engine. “Developers are building projects in equilibrium with market demand, which has kept the market from seeing an oversupply of space,” he says.

Additionally, class A asking rents are increasing throughout the region at the same time that some property owners are offering concessions to entice tenants from class B to come over to newer, class A buildings. One property owner who doesn’t expect to have that problem is St. Joe Commercial, the largest class A office property owner in metro Orlando.

St. Joe expects to lease a minimum of 300,000 sf of new space next year and develop about a half million sf of new product. The developer is also negotiating to buy two and possibly four existing office assets. “It’s a full plate, but we’ll make it,” St. Joe president Frank W. Herring Jr. tells GlobeSt.com.

In metro Charlotte, the office engine is also running at full throttle. Bank of America is building a $13.8 million, 120,000-sf building, 20 miles north of Downtown. Childress Klein Properties Inc. has a four-story, 120,00-sf building under way at LakePoint Corporate Center. High Associates Ltd. has broken ground on the first of two 100,000-sf buildings planned for the $20-million Mallard Point office park.

Atlanta is also experiencing record office absorption. For the nine-month period ending Sept. 30, the metro market absorbed 5.93 million sf, the highest nine-month volume ever tracked by researcher Richard Bowers & Co. Average full-service rents are at $21.34 per sf, up from $21.01 at mid-year. Overall occupancy is 91.76%. The strongest submarket is the GA 400 where 756,783 sf was absorbed in the third quarter alone. That’s almost twice what the Downtown submarket posted (427,906 sf).

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