ORLANDO, FL - A new CB Richard Ellis Group Inc. office market report for the second quarter of this year shows Metro Orlando continues to see a slight increase in average asking rental rates from $22.24 psf in the first quarter to $22.33 psf in the current quarter.
Two submarkets experienced a slight decrease in rental rates; Maitland Center (building at top left) decreased by an average of $0.26 psf, and Downtown (buildings at top right photo) decreased by an average of $0.05 psf.
Despite the slight decrease in rents, the Downtown submarket continues to command the highest average asking rental rate of $26.11 psf.
The South Orlando submarket had a 5.2% increase in rental rents from $21.92 psf in the previous quarter to $23.07 psf in the
current quarter.
Rents for Metro Orlando are projected to decrease in the near future due to an upward trending vacancy rate, downward price pressures from sublease inventories, and large inventories of available space.
The Metro Orlando office market realized total absorption of negative 285,713 square feet this quarter, a 6.3% increase from the previous quarter.
The East Orlando submarket experienced total absorption of positive 59,484 square feet, whereas the South Orlando submarket experienced total absorption of negative 115,628 square feet.
The delivery of Millenia Lakes III (middle right photo) accounted for 75.8% of negative absorption for the South Orlando submarket. Universal Systems & Technology, Inc. leased 55,215 squar
e feet at Quadrangle 3850,(bottom left photo) which accounted for 95.8% of positive absorption in the East Orlando submarket.
The Downtown submarket experienced positive 25,357 square feet of sublease absorption, which accounts for 30.8% of total sublease absorption.
The total vacancy rate for the Metro Orlando office market is 12.0% or approximately 4.1 million square feet of vacant space. Of that 4.1 million square feet, approximately 8.7% is vacant sublease space, down 280 basis points from the previous quarter.
Compared to the previous quar
ter, the East Orlando and North Orlando submarkets are the only two submarkets to experience a decrease in vacancy rates of 1.0% and 0.3%, respectively.
Two submarkets experienced a slight decrease in rental rates; Maitland Center (building at top left) decreased by an average of $0.26 psf, and Downtown (buildings at top right photo) decreased by an average of $0.05 psf.
Despite the slight decrease in rents, the Downtown submarket continues to command the highest average asking rental rate of $26.11 psf.
The South Orlando submarket had a 5.2% increase in rental rents from $21.92 psf in the previous quarter to $23.07 psf in the
current quarter.Rents for Metro Orlando are projected to decrease in the near future due to an upward trending vacancy rate, downward price pressures from sublease inventories, and large inventories of available space.
The Metro Orlando office market realized total absorption of negative 285,713 square feet this quarter, a 6.3% increase from the previous quarter.
The East Orlando submarket experienced total absorption of positive 59,484 square feet, whereas the South Orlando submarket experienced total absorption of negative 115,628 square feet.
The delivery of Millenia Lakes III (middle right photo) accounted for 75.8% of negative absorption for the South Orlando submarket. Universal Systems & Technology, Inc. leased 55,215 squar
e feet at Quadrangle 3850,(bottom left photo) which accounted for 95.8% of positive absorption in the East Orlando submarket.The Downtown submarket experienced positive 25,357 square feet of sublease absorption, which accounts for 30.8% of total sublease absorption.
The total vacancy rate for the Metro Orlando office market is 12.0% or approximately 4.1 million square feet of vacant space. Of that 4.1 million square feet, approximately 8.7% is vacant sublease space, down 280 basis points from the previous quarter.
Compared to the previous quar
ter, the East Orlando and North Orlando submarkets are the only two submarkets to experience a decrease in vacancy rates of 1.0% and 0.3%, respectively. Despite experiencing a decrease in vacancy rate, the North Orlando submarket had the highest vacancy rate in Metro Orlando with 16.1%, followed by the Downtown submarket with a 12.9% vacancy rate.
Due to more stringent lending standards, investment sales volume in Metro Orlando decreased by 62.0% compared to the same year-to-date period in 2007.
Of the $119 million in investment sales, $89 million, or 74.8%, came from office buildings sold within the Central Business District of Metro Orlando. National average cap rates have increased by 40 basis points from 6.5% in April of 2007 to 6.9% in April of 2008.
Due to more stringent lending standards, investment sales volume in Metro Orlando decreased by 62.0% compared to the same year-to-date period in 2007.
Of the $119 million in investment sales, $89 million, or 74.8%, came from office buildings sold within the Central Business District of Metro Orlando. National average cap rates have increased by 40 basis points from 6.5% in April of 2007 to 6.9% in April of 2008.
Contact: Sheena Mohammed, 407.839.3119, sheena.mohammed@cbre.com
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