Cen­tral Florida’s

Orlando Sentinel - - FRONT PAGE - By Bill Zim­mer­man Staff Writer wz­im­mer­man@tronc.com

over­sup­ply of of­fice space is likely to get worse next year, a new re­port states.

Cen­tral Florida’s over­sup­ply of of­fice space is likely to get worse next year, a new re­port says.

Lake Mary led the area with 120,350 square feet of va­can­cies amid changes in of­fice oc­cu­pancy dur­ing the sec­ond quar­ter of the year, ac­cord­ing to a re­port by com­mer­cial real es­tate bro­ker JLL this week. Other losses were seen in Mait­land (49,608) and south­west Or­lando (41,821), while the re­gion’s big­gest gains were seen in the uni­ver­sity area (87,386) and down­town (30,507).

Over­all, Cen­tral Florida saw about 80,000 square feet of of­fice space go un­filled, with va­cancy up a tenth of a per­cent­age point year over year to 10.3 per­cent, ac­cord­ing to JLL.

New of­fices have only be­gun to make an im­pact. So far, about 119,000 square feet of of­fice space has been added dur­ing the first half of the year, but an­other 454,800 square feet are be­ing built that will push avail­able space to more than 28 mil­lion square feet.

“Loom­ing large va­can­cies are com­ing to down­town Or­lando in late 2019,” JLL’s re­port said.

The of­fice tower be­ing con­structed at Church Street and Gar­land Av­enue, where SunTrust will move its head­quar­ters, is a big part of 214,800 square feet of of­fice space be­ing built in down­town Or­lando — and 454,800 for the re­gion over­all.

SunTrust’s Or­lando cor­po­rate of­fices will va­cate 250,000 square feet in two build­ings along Or­ange Av­enue. The bank will take 90,000 square feet in the new SunTrust Tower, which has an­other 110,000 square feet of of­fice space along with an AC Ho­tel by Mar­riott, a SunRail sta­tion, meet­ing space and re­tail in the 28-story build­ing un­der con­struc­tion.

Other an­nounced ten­ants in­clude busi­ness con­sult­ing firm RSM and co-work­ing provider E|Spaces.

Avail­able space in and around Or­lando could fill quickly, how­ever, said an­a­lyst Chris Owen of com­mer­cial bro­ker Cush­man and Wake­field. Prospec­tive ten­ants out­side the area look­ing to es­tab­lish oper­a­tions here strug­gle to find large spaces of 20,000 square feet or more, he said.

“We’ve been crossed off so many lists for cor­po­rate ex­pan­sion be­cause we don’t have the space,” he said. “Most won’t wait three years for a new build­ing to be con­structed.”

Va­cancy rates al­ready rose above the re­gion’s over­all av­er­age in Al­ta­monte Springs, at 26.2 per­cent, and Lake Mary, at 11.3 per­cent, dur­ing this year’s sec­ond quar­ter.

A 115,000-square-foot fa­cil­ity be­ing built in Lake Mary, Edi­son at Primera, will be half leased when con­struc­tion is com­pleted some­time this month, JLL said.

Rents for of­fices as mea­sured by JLL are high­est in down­town Or­lando, at an av­er­age of $27.97 per square foot, and the uni­ver­sity area, at just a penny less. Class A space, the new­est of­fices with the best ameni­ties, are most ex­pen­sive near the uni­ver­sity at $33.73 per square foot, well ahead of down­town Or­lando’s $29.48 av­er­age rate.

Class A space for the re­gion is up 7 per­cent year over year, ac­cord­ing to Cush­man and Wake­field’s sec­ond-quar­ter re­port.

“Rents are not only at cycli­cal highs but his­toric highs,” Owen said.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.