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Central Florida Office Market Report

Average Asking Rent (Price/SF)      $22.98
Vacancy Rate (%)          7.9%
Net Absorption (SF)  226,625

The second quarter of 2018 marked yet another slowdown for Central Florida's office sector. Demand continued to outpace supply with over 226,000 square feet of positive net absorption for the quarter, bringing year-to-date absorption to more than 580,000 square feet. This was a 33.1% decline in net absorption from the 866,700 square feet posted at the midpoint of one year ago. Overall vacant space dipped slightly from the previous quarter and declined 100 basis points from second-quarter 2017 to settle at 7.9%. Occupancy in Central Florida has reached a record high of more than 92.0%. The Class A segment saw a resurgence in demand, which tallied nearly 500,000 square feet of positive net absorption through the first half of the year, while Class B demand tapered off with only 145,851 square feet of year-to-date absorbed space. Lower-tier space continued to struggle, as supply exceeded demand with 48,815 square feet of negative absorption year-to-date. The office sector is unquestionably cooling off after six years of robust growth. However, the limited development of speculative office space coupled with the efficient use of space by companies makes significant market corrections unlikely, barring any unforeseen occurrences. The quoted average rental rate ticked upward to $22.98/SF from $21.98/SF one year ago.

Central Florida Industrial Market Report

Average Asking Rent (Price/SF)             $5.88
Vacancy Rate (%)              4.7%
Net Absorption (SF)        995,776

The Central Florida industrial market saw another healthy quarter, as almost 996,000 square feet was absorbed during the second quarter of 2018, bringing year-to-date net absorption to 1.8 million square feet This was down from the 3.8 million square feet absorbed at the end of second quarter one year ago, showing a significant slowdown in demand growth. Four buildings totaling approximately 619,000 square feet were delivered during the quarter, and 88.0% of the space remained vacant, contributing to the 10-basis-point drop to 4.7% from the previous quarter. The recent surge in industrial development brought an additional 3.4 million square feet of new warehouse/distribution space over the past 12 months. In spite of recent new development, the region's demand still pushed overall vacancy down 30 basis points from the 5.0% rate recorded one year ago. Another 15 buildings totaling over 3.8 million square feet were under construction.



Central Florida Office Market Report
2Q18
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Central Florida Industrial Market Report
2Q18
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