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Central Florida Office Market Report

Average Asking Rent (Price/SF)      $22.58
Vacancy Rate (%)          8.2%
Net Absorption (SF)   213,030

Central Florida's office market saw another quarter of growth, as demand outpaced supply for the 15th consecutive quarter with over 213,000 square feet of positive net absorption. Overall vacancy held level from the previous quarter at 8.2% but still dropped 90 basis points from one year ago to remain at the lowest level recorded in the market's history. In fact, the region led Florida in office demand, which can be attributed to the strong performance of the Tampa office sector. The desire for higher-tier space dominated as the Class A segment posted over 176,000 square feet of net absorption, while the Class B market trailed with 124,000 square feet absorbed over the quarter. The performance of the Class C segment remained lackluster, with supply outpacing demand by 87,000 square feet of negative absorption. As lower-tier space struggled, the gap in demand between the Class A and Class B segments have closed. The quoted average rental rate ticked upward to $22.58/SF from $21.83/SF one year ago. Class A space saw the largest year-over-year year increase, to $26.27/SF, while Class B space saw a similar increase, to $21.47/SF from $20.87/SF during the same time period. Tight market conditions and diminishing blocks of available space have not translated into significant rent increases from landlords. No office buildings were completed by the close of the first quarter, and only three office developments totaling 518,800 square feet were under construction.

Central Florida Industrial Market Report

Average Asking Rent (Price/SF)             $5.76
Vacancy Rate (%)              4.9%
Net Absorption (SF)        534,953

The Central Florida market posted another solid quarter, as another 534,953 square feet was absorbed at the start of 2018. This sturdy absorption did not make up for all of the 890,000 square feet of construction completions brought to the market, however, as vacancy ticked upward by 10 basis points from the previous quarter but remained 20 basis points lower from one year ago to settle at 4.9%. The recent surge in industrial development, coupled with the strong ties to state distribution, has helped keep vacancies from rising significantly and attracts interest from national companies looking for distribution hubs in the state. Quaker's occupation of its 605,000-square-foot distribution center in the Tampa market alone compensated for the supply that came back to the market, allowing demand to outpace supply for the quarter.



Central Florida Office Market Report
1Q18
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Central Florida Industrial Market Report
1Q18
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