SOUTHEAST SNAPSHOT, NOVEMBER 2011
Orlando Office Market
Amid the current economic uncertainty, the Orlando office market continued to make positive gains within the third quarter, seeing 193,955 square feet of positive absorption. Although well short of pre-recession levels, this quarter’s performance shows a steady increase in leasing velocity as the Orlando market has averaged only 119,881 square feet of quarterly absorption during the past year.
The Orlando economy has continued to stabilize. Monthly decreases in unemployment have become somewhat of a trend as the latest local unemployment statistics for August saw a year-over-year decrease from 11.7 percent to 10.3 percent. This sustained trend does wonders for local economic sentiment, especially among small business owners whose bottom line is highly dependent on the spending habits of other businesses within the local market.
The Orlando CBD saw another quarter of positive absorption with Class B space leading the submarket to a total net gain of 26,352 square feet. Maitland Center is also beginning to show improvement with 31,289 square feet of positive absorption. The majority of this quarter’s positive gains were seen in the Southwest submarket, which absorbed 93,145 square feet of space amid a mix of expansion and new tenants.
Average rental rates rose slightly to $20.68 overall. Also noteworthy this quarter is the decreased availability of sublease space. During the third quarter, 37 percent of the total vacancy decrease can be attributed to positive sublease absorption. The quicker this space is absorbed the better for landlords who are competing with a seemingly endless availability of low cost space.
Significant new leases this quarter included: Orlando Health leasing 36,162 square feet and Old Florida National Bank leasing 18,300 square feet Downtown, as well as Consumer Portfolio Services leasing 19,089 square feet and Property Insight leasing 14,454 square feet, both in Maitland Center. Noteworthy renewals included the 173,740-square-foot lease by Fiserv Solutions at 600 Colonial Center in Lake Mary.
— Greg Morrison, CCIM, SIOR, president, Morrison Commercial Real Estate.
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