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ORLANDO-Three back-to-back hurricanes that struck the metro area in August and September have dented the 6.9-million-sf service centers and flex space market in south Orange County but net absorption is still in the positive column, reports Maitland-based Rebman Properties Inc.

The loss of two key tenants brought the vacancy level to 11.5% from 11.38% in the second quarter IEP enterprises vacated 21,000 sf at Northwest Plaza and Global Staging exited 19,068 sf at Airport Distribution VII. Net absorption totaled 67,494 sf for the third quarter and 215,918 sf for the year to date.

Lyle N. Nelsen, Rebman’s corporate and industrial specialist, is still predicting the service center segment will end the year with positive net absorption of 500,000 sf. There is 793,816 sf on the to-rent market.

“In spite of a slow quarter, there are now definite signs of increased activity and some positive marketing decisions,” Nelsen says. “One center raised its rates $1 per sf. Several others indicated they were trying to be firmer on rates and breaking away from free-rent offers.”

Another issue received attention in the quarter was short-term leases. “Some agents indicated they wanted to stay away from them,” Nelsen says. One new center was added to the Rebman survey–Southgate East with 85,000 sf at Pineloch and Orange Avenue. Mary Hurley of Pineloch Management is the leasing agent.

Although the service centers/flex space market produced positive absorption again this quarter, “the statistics paint a picture of a market that came to a sudden standstill,” points out Nelsen. “There is a noticeable shortage of large lease prospects in the market.”

Third-quarter leases over 5,000 sf signed in the third quarter included Valencia Institute, 31,680 sf at Sandlake Tech brokered by Tom McFadden of Advantis; Crown Equipment, 21,000 sf at Sunport III handled by Mike Borling of East Group; Rotech, 15,000 sf at 3600 Vineland Road, brokered by Dan Webb of Webb International; and Stonepath Logistics, 10,768 sf at Airport V, handled by David Murphy of CB Richard Ellis Inc.

New buildings under construction total 268,669 sf but they are not expected to surface until 2005. The properties are SunPort V, 63,325 sf at SunPort Lane, expected to be completed in November; Park South Business Center, 32,552 sf at Sand Lake, scheduled for a December completion; Orlando Corporate Center 100, 80,340 sf at Southland Boulevard, November completion; and South Orange Business Center, 91,452 sf on South Orange Avenue, tentatively scheduled for completion in July 2005.

EastGroup is handling the leasing for SunPort V and Park South Business Center. ProLogis is the leasing agent for Orlando Corporate Center 100. And CB Richard Ellis is handling leasing for South Orange Business Center.

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