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ORLANDO-Although dwindling amounts of vacant developable land are driving dirt costs to record highs, it hasn’t stopped Central Florida’s explosive growth, reports Colliers Arnold Real Estate Co. But the scarcity of developable land in the metro area is pushing developers to outlying areas in a seven-county market.

“Analysts predict that residents and industries looking for value will head to West Volusia county,” says Bobby Palta, Collier Arnold’s executive director of market analytics and geographic information systems. He cites a recent sale in suburban Apopka, 17 miles north of Downtown. A 3,048-sf office building on 1.4 acres sold for $607 per sf, a suburban city record.

More than 1.2 million sf of office product is currently under construction in Central Florida. During the second quarter, 84,000 sf of new product was delivered. Overall vacancy remains flat at 18%. Class A vacant space was also flat at 20.2%. Overall negative absorption was 7,454 sf. Class A had negative absorption of 20,371 sf.

However, Palta is confident “conditions will likely improve in the short-term” because during the second quarter “almost one million sf of new deals were signed and most of that absorption will be realized during future quarters.”

Still, the Colliers Arnold analyst says, “for things to improve in the long-term, Central Florida leaders need to work to bring new businesses to the area. Until that happens, we will continue to see one submarket stealing tenants from another.”

Palta says “while that may help one individual submarket over another, it will do little to improve the overall office market.”

The analyst says “there is talk of new deals in the works, and [also] formerly dead deals that me be resurrected,” such as the Scripps office campus generally considered headed for West Palm Beach. “Central Florida is well poised to capture and capitalize on new job growth in the region,” Palta says.

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