Net absorption is averaging 800,000 sf per quarter with anine-month absorption tally of 2.55 million sf. What the Orlandoindustrial market could use, however, are more spec warehouse anddistribution projects in the 25,000-sf to 50,000-sf range toaccommodate smaller users, according to a third-quarter study byGrubb & Ellis Co. Developers are largely ignoring the littleguy to focus on big-box projects for national clients.

"Although we are seeing an extensive amount of new construction(1.4 million sf in the third quarter), the product being builtserves the needs of flex space users and large, 150,000-sf-pluswarehouse/distribution tenants," Shelton says. The shortage ofsmaller product is triggering an active built-to-suit category.

Rents are all over the place. verall warehouse/distributionrents are down while R&D/flex rates are up from second quarter.Average asking warehouse/distribution rent is $4.37 per sf, downnine cents. Average R&D/flex space is $8.01 per sf, up 13cents. "Look for rental rates to fluctuate as developers useincentives to attract new tenants and retain existing tenants,"predicts Shelton. "While demand remains strong, we do notanticipate a trend of declining rates."