Smaller, 20,000- to 60,000-square-foot owner/user buildings are being developed in Orlando, Florida’s office market. “However, development is mostly on hold in anticipation of CNL Tower’s expected internal expansion of approximately 100,000 square feet,” says Carole Sealock, research and marketing manager with Grubb & Ellis. “Spec projects are also on hold as developers wait for the market to turn.”

She continues, “CNL and Siemens Power moved to Research Park in the East University submarket, and a national call center is seriously considering 50,000 square feet in the southwest tourist submarket.”

The average rental rate for the central business district is $24 per square foot, and suburban Class A space averages approximately $20.55 per square foot. The overall office vacancy rate is 17.3 percent. The CBD is at approximately 13.9 percent vacant and suburban areas are around 18.2 percent. Hughes Supply created an additional 86,284-square-foot vacancy in the Wachovia tower in downtown Orlando with the move to its new corporate headquarters.

Looking ahead, Research Park will stay strong because of the technology advantage and the tie-in with the University of Central Florida. “Keep an eye on Maitland because of the competitiveness of the market and the deals that are being struck due to significant amounts of availabilities,” Sealock advises.

Tenants are gravitating toward better values created by the newer buildings. 2004 will be a year for reaching an equilibrium with a new development wave expected to begin in 2005.

Other members of Grubb & Ellis contributing to this article include Jeff Sweeney, managing director; Michael Sweeney, vice president; and David Chapin, vice president.

©2004 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.