(To read more on the industrial market, click here.)

ORLANDO-Property owners in the metro area’s 77-million-sf industrial market are anticipating another solid performance in 2006 as rents rise and available space gets leased quickly, according to a new analysis by the Orlando office of GVA Advantis. Vacancy is at 8.1%, the lowest in three years.

Average flex asking rents are at $9.73 per sf; general industrial rates at $5.11. The East/University and Southwest flex space submarkets are getting an average $12 per sf, the analysis finds.

Net absorption has hit 2.3 million sf, still one million sf less than the previous year due to lack of product. A total 3.55 million sf of new product is scheduled for delivery this year with two million sf already under construction. A total 1.2 million sf of new construction was delivered in 2005, according to GVA Advantis.

“It is no secret that increasing construction costs and a shortage of construction labor has put the strain on developers,” says Sasha Pardy, director of research and marketing at GVA Advantis. “However, when a project has been planned, with much time and investment involved, it will deliver.”

Pardy predicts the Airport/Southeast submarket is “the one to watch” in 2006. It has 1.65 million sf in its construction pipeline. The largest project is Whirlpool’s 500,000-sf distribution center being built at State Road 417 and Orange Avenue and scheduled for completion in the second quarter, as GlobeSt.com previously reported. Windoor Corp. also has a 325,000-sf bulk warehouse under construction in International Corporate Park and expected to be delivered in August.

The Airport/Southeast submarket also boast the highest absorption with 546,000 sf. This area is home to the 20-year-old, 555,000-sf former Toys-R-Us warehouse at 10701 Central Port Dr. just leased to Staples Inc., as GlobeSt.com previously reported.

Two new distribution leases closed in the past week include Sofa Express Inc. of Groveport, OH taking 103,950 sf for an estimated 10 years at Florida Central Park in Polk County; and American Hotel Register Co. leasing 160,000 sf, also for an estimated 10 years, at a new distribution center in Cypress Park East in southwest Orlando. Cal East Industrial Investors LLC, affiliated with the California Public Employees Retirement System of Sacramento, CA, is developing Cypress Park East.

Industrial buildings, as an investment product, “continue to increase in popularity,” Pardy notes. A total 5.6 million sf, valued at $352 million, traded in 2005. “Orlando’s [average] per-sf price has increased dramatically, coming in at $63.10 per sf.” Pardy adds she expects “another strong year of investment activity” in 2006.

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