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Central Florida Market Reports

Central Florida Office Market Report

Average Asking Rent (Price/SF)      $23.12
Vacancy Rate (%)          7.8%
Net Absorption (SF)   (283,144)

Central Florida's office market saw demand growth decelerate from the first quarter of 2018 through the fourth quarter, when supply pulled ahead, yet annual absorption remained positive with more than 547,000 square feet. This was significantly less than the 1.9 million square feet absorbed during 2017, but the vacancy rate still fell 30 basis points year-over-year to 7.8%, finishing the year only slightly higher than the record low of 7.6% recorded in the second and third quarters. The market's low vacancy along with disciplined construction activity left the power in lease discussions to landlords. Concessions have all but disappeared for smaller companies, while midsize and larger companies are not seeing the free rent and tenant improvement dollars they were offered a few years back. The overall average asking rent increased $0.52/SF from year-end 2017 to $23.12/SF. Orlando's vacancy remained the lowest of all the major markets in the country, while the Tampa market holds the second-lowest vacancy in Florida. Construction activity in the region remained tepid in 2018, with only two buildings totaling 237,800 square feet completed and no projects delivered. Six buildings totaling 887,000 square feet remained under construction at year-end, with a good portion pre-leased. Consequently, no significant impacts should occur when these buildings are delivered over the next two years.

Central Florida Industrial Market Report

Average Asking Rent (Price/SF)                $6.09
Vacancy Rate (%)                  4.7%
Net Absorption (SF)           606,746

The past year saw demand outstrip supply, as more than 5.1 million square feet of positive net absorption was posted for all of 2018, falling short of the 6.9 million square feet absorbed in 2017 and well below the record high of 9.4 million square feet set in 2016. The region's industrial sector saw another durable performance, as vacancy remained level from one year ago at 4.7% in spite of 5.4 million square feet of new inventory delivered throughout the year. Sixteen buildings totaling more than 3.2 million square feet remained under construction, which are projected to come on the market over the next 12 months. The market has seen a surge of new demand from outside the market along with an increased need for space from companies already in the market. Although tight market conditions were in place, asking rents slowly pushed upward, although not to the levels seen in other markets across the nation. Year-over-year, the overall weighted average asking rental rate increased $0.36/SF to $6.09/SF. General industrial space saw an increase of $0.65/SF from $5.63/SF one year ago. Warehouse/distribution increased $0.32/SF from $5.84/SF, while R&D/flex rates were up $1.14/SF from $7.31/SF. Significant increases in the weighted averages were hindered by the pre-leasing of newly delivered inventory, which allowed lower-tier availabilities to have a greater impact.



Central Florida Office Market Report
4Q18
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Central Florida Industrial Market Report
4Q18
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