Thank you for sharing!

Your article was successfully shared with the contacts you provided.

ORLANDO-With a first-quarter net absorption of only 36,000 sf, the 7.1-million-sf south Orlando service center/flex market could face a record oversupply of product as it prepares to usher in 459,377 sf of new space from 10 locations this year on top of 846,950 sf of existing space.

“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.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt. NET LEASE Spring 2021Event

This conference brings together the industry's most influential & knowledgeable real estate executives from the net lease sector.

Get More Information

GlobeSt. NET LEASE Awards 2021Event

These awards honor the industry's most influential and knowledgeable real estate executives from the net lease sector.

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.