Thank you for sharing!

Your article was successfully shared with the contacts you provided.

ORLANDO-Small business owners, eager to own their own building, are buying more combination industrial-office properties rather than leasing the space these days, according to a new analysis by Maitland-based Rebman Co.

That second-quarter scenario has hurt leasing activity in the 75-building, 7.3-million-sf service center in south Orange County, says Lyle N. Nelsen, a senior Rebman corporate and industrial specialist. “Condo sales for the large users were not near as attractive,” Nelsen says. “If large users were to own their space, they would more likely to build or buy a larger stand-alone building.”

Condo sales have affected the service center market’s overall vacancy level which stands at 12.03%, up from 11.86% in the first quarter. Many of the condo sales are being done at Crownpointe Commerce Park on Sand Lake Road and in other centers along John Young Parkway and Sand Lake Road. The arrival of three new centers and the loss of three major leases also contributed to the rising vacancy rate, Nelsen says.

New flex buildings added in the second quarter were the 82,000-sf Orlando South Park at 8810 Commodity Dr.; the 70,050-sf Southbridge Commerce V at 2616 Commerce Dr.; and the 34,500-sf Progressive Building at 2256 Taft-Vineland Rd.

Large losses to the service center market included Island One vacating 49,805 sf at Sand Lake Tech; the Orange County Sheriff’s Department moving out of 28,000 sf at John Y. Commerce Building; and Underground Brokers leaving 14,882 sf at Lee Vista II.

“Leasing rates are holding steady, although some centers have raised their rates a dollar on renewals and expansions,” Nelsen notes. “Very little free rent is being offered” even though “that market is flushed with an abundance of inventory [877,410 sf].” Additionally, 355,127 sf of new product is scheduled to surface this year, Nelsen says. “Orlando’s flex market is more than ready for the growth that is to come,” he adds.

The market ended the quarter with a positive net absorption of 200,370 sf, but only 17 of the 75 centers posted positive leasing gains. Ten service centers were in the negative absorption territory. The 48 remaining centers showed no change.

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


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.