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Central Florida Market Reports

Central Florida Office Market Report

Average Asking Rent (Price/SF)      $22.48
Vacancy Rate (%)          8.9%
Net Absorption (SF)    279,404

Central Florida's office market reported net positive absorption of 279,404 square feet in the third quarter of 2017, a modest improvement from the second quarter, when a drop-off in demand caused a slowdown in the market. Year-to-date absorption totaled over 1.1 million square feet, just beating out South Florida for the strongest growth in Florida. Overall vacancy dropped another 20 basis points, bringing occupancy to 91.1%, its highest level ever recorded. The Class A segment struggled during the third quarter with 59,964 square feet of negative net absorption, while the Class B market rebounded after a poor second-quarter performance with 372,409 square feet of absorbed space. Lower-tier Class C space also recorded negative absorption of 33,041 square feet. Asking rents continued their steady increase, as the quoted average ticked upward to $22.48/SF from $22.00/SF in the second quarter. Class A space increased $0.80/SF to $26.35/SF, while Class B space experienced a slightly smaller increase, from $21.07/SF to $21.17/SF, during the same time period. It is likely that rents in high-end space have not reached levels that steer tenants from quality to cost, but more limited availability and lack of new supply could be a cause of a shifting tide to lower-tier space gaining momentum.

Central Florida Industrial Market Report

Average Asking Rent (Price/SF)             $5.52
Vacancy Rate (%)              5.1%
Net Absorption (SF)        907,004

The Central Florida industrial market posted another quarter of solid performance, as nearly 907,000 square feet was absorbed in the third quarter of 2017, and vacancy shrank by 30 basis points from one year ago to 5.1%. Since the beginning of 2016, robust demand has accounted for more than 13.4 million square feet of positive absorption, increasing occupancy to nearly 95.0% for the first time in over a decade. This demand has come both new tenants entering the market and established tenants expanding in the market. The occupation of new industrial inventory delivered to the market lessened the impact such strong development otherwise would have had on vacancy. The decrease in vacancy translated into an average rent of $5.52/SF, an increase of $1.19/SF from when rents were at their lowest five years ago.



Central Florida Office Market Report
3Q17
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Central Florida Industrial Market Report
3Q17
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