GVA Advantis Presents Second-Quarter Report on Metro Orlando's Office and Industrial Markets

(Aerial photo above of Orlando's business section with Lake Eola in foreground.)

ORLANDO, FL--GVA Advantis presents its second-quarter reports on Metro Orlando's office and industrial markets.

Metro Orlando’s overall office vacancy rate climbed to 15.3% from 14.5% in the first quarter.

Predictably, effective rent suffered, losing $0.39 PSF over the first quarter. Net absorption took a big hit, landing at (372,251 SF). This is on top of the first quarter’s loss of (170,649 SF).

Eleven of the 12 submarkets measured, the exception being Northwest Orlando, suffered net absorption losses. About half the submarkets ended the quarter with a decrease in sublet space available.

Whereas Downtown Orlando’s average rental rate in the first quarter of 2008 was up over $1 PSF from the year end, it has dropped beneath that year-end level to a more manageable average of $25.54. This can be viewed as a positive reaction to headlines announcing that Florida has endured some of the country’s worst job losses, along with Arizona, California and Nevada, among others.

Market Close Up

· $24.38 Class A overall average asking lease rate on direct vacant space in Orlando

· 1.4 million Total square feet of 15,000 SF+ office space currently under construction

· 44,744 Fewer square feet available for subleasing in the Altamonte Springs/Longwood submarket over 1Q08

· 536 Number of office buildings at 15,000 SF+ being tracked in Orlando’s 12 submarkets

· $130.06 Average price per square foot paid for six Orlando area office properties sold during 2Q08

Industrial Market Highlights

For the quarter, Metro Orlando’s overall industrial vacancy rate climbed to 9.2%, up from 8.0% in the first quarter. Interestingly, effective rent increased approximately $0.29 psf over the first quarter.

Net absorption suffered, however, ending the quarter at (436,886) SF. This is on top of the first quarter’s loss of (267,110) SF. Flex space is experiencing the most substantial vacancy with double-digit availability percentages in all submarkets but one – Orlando Central Park, which is enjoying a low 4.4% vacancy rate.

In what could be an example of the housing market’s detrimental effect on commercial properties, the Airport/Southeast submarket lost a major tenant in Ashley Furniture, (middle right photo) which vacated a 350,000 SF warehouse in April.

The loss of that one tenant resulted in a 3.8% sublet vacancy rate in the bulk warehouse sector of that submarket. Ashley now occupies a much smaller warehouse space in Brandon, Fla., and in early 2007, purchased adjacent land on which to build more space, but ground has not yet broken.

Market Close Up

· $6.81 Overall average asking lease rate on vacant industrial space in Orlando

· 719,000 Total square feet of 20,000sf+ industrial space currently under construction

· 593,463 Increase over 1Q08 in square footage available for subleasing in all 11 submarkets over 1Q08, a 125% increase largely due to one vacating tenant

· 1,254 Number of industrial buildings at 20,000sf+ being tracked in Orlando’s 11 submarkets
$89.32 Average price per square foot paid for seven Orlando area industrial properties sold during 2Q08

For a complete copy of the Office and Industrial Reports, please contact

Shelli H. Browning
Director of Research and Marketing
Advantis Real Estate Services Company
255 South Orange Avenue, Suite 750
Orlando, FL 32801
Office 407.849.6600Direct 407.999.4775
Fax 407.849-6010
E-mail sbrowning@gvaadvantis.com
http://www.gvaadvantis.com/