SOUTHEAST SNAPSHOT, NOVEMBER 2007

Orlando Industrial Market

In Central Florida, we are seeing larger tenants consolidating their Orlando, Tampa, and Miami requirements into a single statewide distribution center. 

New industrial product planned for the Central Florida includes International Corporate Park and the Taurus site in east Orlando,  Oakmont’s 700,000-square-foot development at State Road 429 in western Orlando, and the continued development of Airport International Park by Liberty Property Trust in South Orlando. 

The majority of new industrial development is occurring along the Highway 27 corridor, from Haines City, south of Interstate 4, north to the Florida Turnpike. Larger warehouse tenants in Central Florida require a centralized location to distribute goods throughout the state of Florida. Groveland, located at the interchange of U.S. Highway 27 and the Florida Turnpike, and Haines City, just south of Interstate 4 on U.S. Highway 27, both provide a centralized location for industrial users looking to distribute their product statewide out of one location.

Orlando is becoming a top tier industrial market due to its location, population and job growth. Most of the major industrial developers already have a position in the market. We are also seeing industrial developers in South Florida coming to Orlando as it is becoming prohibitively expensive to develop industrial space in the Miami market. Conversely, we are seeing many Atlanta-based developers looking at Central Florida due to the high vacancy rates in industrial space in Georgia as compared to Orlando’s very low 5.7 percent vacancy rate.

The recent trend among developers is to build 400-foot deep cross dock facilities, typically in the 400,000-square-foot range, to go after the demand for the statewide distribution user. Developers have also been trying to attract the higher office finish user by developing very shallow buildings in the 75- to 95-foot-deep range that can be demised into very small rental units.

There have been a number of large retail tenants in the process of taking down large blocks of space in Central Florida. Due to the residential slowdown, leasing activity has waned among the building supply tenants who typically lease space in the 20,000- to 60,000-square-foot range.

Bulk distribution lease rates typically range from $4.50 to $5, while industrial office/warehouse/flex space has been leasing in the $5.50 to $6.50 range based upon the amount of office space and functional utility of the space.

The Florida Turnpike corridor between Orlando and Wildwood holds the greatest potential for future industrial growth moving forward. Polk County along the I-4 corridor between Orlando and Tampa has been the primary growth corridor during the previous 5 years. However, given that two-thirds of the truck traffic entering the state of Florida travels down I-75 to the Florida Turnpike, this area is the gateway to Central Florida and the primary corridor to South Florida along the turnpike.

— David Murphy is senior vice president of CB Richard Ellis in Orlando, Florida.


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