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Orlando Bulk Warehouse Leasing Market Plunges
(WINTER PARK, FL) -- Metro Orlando's 17-million-square-foot bulk warehouse leasing market is hurting. Vacancy today stands at 16.75 percent, the highest since fourth quarter 1993. The new level rose from13.76 percent in third quarter 2008.
"The market is expected to get worse before it gets better," says Greg Rebman, vice president, Rebman Properties Inc., the Winter Park, FL-based firm that has been tracking the area's industrial market for 25 years.
He says Orlando industrial brokers polled for this survey expect 2009 to be "challenging."
More downsizing, consolidations, bankruptcies and increased space marketed for sublease are expected through 2009. "While net absorption is expected to be only slightly negative, the vacancy rates are expected to continue to increase throughout the year," Rebman says.
Demand
When the market plunged in fourth quarter 2008, there was 205,428 square feet of negative net absorption in the 136 surveyed buildings, "the worst showing since the second quarter of 2003," notes Rebman. "There were many downsizings, bankruptcies and other exits from the market following the collapse of financial markets in the third quarter."
Leasing
The largest leases for the fourth quarter included Disney, 67,000 square feet at Lincoln International Corporate Park, Building C; Frito-Lay, 56,875 s.f. at Center of Commerce, Building 909; and G & K Services, 14,957 s.f. at Crownpointe V.
Three buildings added to the survey in the period, "exacerbated the otherwise dismal fourth quarter," says Rebman.
The buildings were Lincoln International Corporate Park, Building A, a 92,616 square foot, rear-load facility; and Building C, a 141,660 square foot, rear-load facility; both in International Corporate Park in East Orlando.
Also added to the survey was the 118,500 square foot, front-load building at 2216 Directors Row in Orlando Central Park.This property was previously an owner-occupied facility but was purchased by Liberty Property Trust for lease to industrial tenants.
The average quoted rental rate for the 136 buildings surveyed is $4.62 psf triple net, down from $4.67 psf at the end of the third quarter.
Construction
Beltway Distribution is nearing completion at the intersection of Lee Vista Boulevard and Highway 417 (The Greenway). Slated for completion this month, Building #100 is a 141,810 s.f., rear-load building; Building #200 is a 145,540 s.f., rear-load building; and Building #400 is a 378,600 square foot, cross-dock building.
Greg Rebman
He says Orlando industrial brokers polled for this survey expect 2009 to be "challenging."
More downsizing, consolidations, bankruptcies and increased space marketed for sublease are expected through 2009. "While net absorption is expected to be only slightly negative, the vacancy rates are expected to continue to increase throughout the year," Rebman says.
Demand
When the market plunged in fourth quarter 2008, there was 205,428 square feet of negative net absorption in the 136 surveyed buildings, "the worst showing since the second quarter of 2003," notes Rebman. "There were many downsizings, bankruptcies and other exits from the market following the collapse of financial markets in the third quarter."
Leasing
The largest leases for the fourth quarter included Disney, 67,000 square feet at Lincoln International Corporate Park, Building C; Frito-Lay, 56,875 s.f. at Center of Commerce, Building 909; and G & K Services, 14,957 s.f. at Crownpointe V.
Three buildings added to the survey in the period, "exacerbated the otherwise dismal fourth quarter," says Rebman.
The buildings were Lincoln International Corporate Park, Building A, a 92,616 square foot, rear-load facility; and Building C, a 141,660 square foot, rear-load facility; both in International Corporate Park in East Orlando.
Also added to the survey was the 118,500 square foot, front-load building at 2216 Directors Row in Orlando Central Park.This property was previously an owner-occupied facility but was purchased by Liberty Property Trust for lease to industrial tenants.
The average quoted rental rate for the 136 buildings surveyed is $4.62 psf triple net, down from $4.67 psf at the end of the third quarter.
Construction
Beltway Distribution is nearing completion at the intersection of Lee Vista Boulevard and Highway 417 (The Greenway). Slated for completion this month, Building #100 is a 141,810 s.f., rear-load building; Building #200 is a 145,540 s.f., rear-load building; and Building #400 is a 378,600 square foot, cross-dock building.
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