Attracted to Stabilizing Fundamentals, Office Investors Target Orlando's Lower Tier Assets

ORLANDO, FL— Fundamentals in the Orlando office market are expected to shift in 2008 as demand generated from moderate office-using employment growth is offset by new construction, resulting in a rise in vacancy, according to the 2008 National Office Report by Marcus & Millichap, the nation’s largest real estate investment services firm.


More than 40 percent of the office space slated to come online this year is concentrated in the
South Orlando submarket, where significant industrial development and continued population
growth are spurring construction.

Also included in the report is the firm’s annual National Office Index (NOI), a snapshot analysis that ranks 43 office markets based on a series of 12-month forward-looking supply and demand indicators. Orlando moves up one place this year to No. 25.

“Properties in the Class B/C sector should garner investor interest in the growing suburban areas and Downtown submarket, where demand for office space is expected to remain steady through the year,” says Gregory Matus,(photo at left) regional manager of Marcus & Millichap’s Orlando office.

Following are some of the most significant aspects of the Orlando Office Research Report:

· Employers are forecast to add 17,800 workers, a 1.6 percent increase.
· Developers are expected to complete 680,000 square feet of competitive office space.
· Vacancy is forecast to end the year at 11.5 percent.
· Asking and effective rents are forecast to gain 3.6 percent to $22.59 per square foot and $19.18 per square foot, respectively.
· Sales activity will likely be concentrated in older properties in the lower tiers, where assets with stable operating fundamentals should prove to be sound investments as the market transitions.

In the 2008 NOI, Seattle moved up three places to secure the No. 1 spot, surpassing last year’s leader New York City, which slipped to No. 2. Boston moved up two spots to No. 3, while San Francisco jumped 12 places to the No. 4 position. Los Angeles slipped two spots, coming in at No. 5.

For a copy of Marcus & Millichap’s National Office Report and the complete NOI rankings, visit http://www.marcusmillichap.com/.

CONTACT:

Stacey Corso
Public Relations Manager
Marcus & Millichap
2999 Oak Road
Suite 210
Walnut Creek, CA 94597
Office: 925.953.1716
Mobile: 415.672.6460
Fax: 925.953.1710
http://www.marcusmillichap.com/