ORLANDO,FL--Opportunities are abundant for tenants in Orlando.
Slowing job growth, high vacancies, and falling lease rates has increased leverage to tenants actively negotiating with landlords, who are eager to fill vacancies for a reasonable rate and term.
The increase in sublease activity over the past year has contributed to the downward pressure on landlords to make it cheaper for tenants entering the market.
This is the third consecutive quarter of declining overall lease rates from its peak of $22.33 per sq. ft. in the second quarter of 2008.
(CNL Center II, middle right photo)
When compared to the previous quarter, the overall lease rate for Metro Orlando decreased by $0.17 to $21.35.
Lease rates have not been this low since two years ago at $21.26.
Class A space in the Downtown submarket continues to command the highest lease rate of $28.39, an increase of $0.18 from the previous quarter. In the suburban market, the East Orlando submarket experienced the highest class A lease rate of $25.31.
Compared to the previous quarter, the total vacancy rate for Metro Orlando increased by 207 basis points to 16.2 percent.
The vacancy rate for Metro Orlando has not been this high since the fourth quarter of 1992 when it stood at 16.9 percent.
The Lake Mary and East Orlando submarkets experienced the lowest vacancies of 10.5 percent and 15.3 percent, respectively. South Orlando and North Orlando submarkets experienced the highest vacancies of 18.5 percent and 21.4 percent, respectively.
(The Plaza complex, Downtown Orlando, bottom right photo)
Net absorption decreased from negative 578,321 sq. ft. in the fourth quarter to negative 539,995 sq. ft.
The South Orlando submarket experienced positive 29,589 sq. ft. of sublease absorption, the only positive sublease absorption in Orlando. Maitland Center experienced negative 189,714 sq. ft. or 35.1 percent of net absorption experienced in Orlando. South Orlando experienced the highest net absorption of negative 5,815 sq. ft.
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