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Central Florida Office Market Report

Average Asking Rent (Price/SF)      $23.28
Vacancy Rate (%)          7.9%
Net Absorption (SF)      -3,839

After 16 consecutive quarters of growth, the Central Florida office market experienced a miniscule correction during the third quarter of 2018, as supply barely outpaced demand with 3,839 square feet of negative absorption. This represented a more balanced market, with vacancy remaining level from one quarter ago but still dropping 60 basis points to 7.9% from one year ago. Market growth for high-end space continued in the third quarter, as the Class A sector turned in 92,811 square feet of absorbed space. This was a stronger performance from the 22,000 square feet seen last quarter. Second-tier space saw a correction for the first time in four years, as Class B space experienced negative absorption of 66,124 square feet. The Class C segment continued to struggle with 30,526 square feet of vacancy returned to the market during the third quarter. Despite the slowdown this quarter, tight market conditions and record low vacancies gave landlords the upper hand in negotiations as the overall average asking rent increased $0.35/6F to $23.28/SF during the third quarter. This was Central Florida's seventh straight quarter of record-breaking average rates, which increased $1.46/SF over the $21.82/SF set in 2008. Orlando held onto the lowest vacancy rate throughout the nation, even after a slight correction in first-quarter 2018. Tampa's office market ranked 15th in vacancy, as its 9.2% rate was well below the national average of 13.3% at the close of the third quarter.

Central Florida Industrial Market Report

Average Asking Rent (Price/SF)                $6.00
Vacancy Rate (%)                  4.7%
Net Absorption (SF)        1,669,525

The Central Florida industrial market experienced its 19th consecutive quarter of strong growth with more than 1.0 million square feet of positive net absorption in each of those quarters. More than 4.2 million square feet of positive net absorption has occurred so far this year pushing vacancy down 30 basis points from one year ago. The occupation of 95.0% of the 2.2 million square feet that was delivered during the third quarter of 2018 was responsible for demand outpacing supply, with the occupation from Amazon, Walmart and Best Buy for large distribution warehouses that were completed this quarter. The market would have seen its first correction in four years had it not been for the large build-to-suit projects combating the move-outs that occurred in the third quarter. The occupation of new industrial inventory delivered to the market lessened the impact that such strong development otherwise would have had on vacancy. The decrease in vacancy translated into an average rent of $6.00/SF, a level not seen in over a decade.



Central Florida Office Market Report
3Q18
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Central Florida Industrial Market Report
3Q18
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