Mounting concerns surrounding the health of the economy, meshed with sluggish employment growth, continue to drag down markets across the country. Orlando\u2019s office market–although somewhat buoyed by employment growth experienced in the hospitality and tourism sectors–is no exception. \u201c[People] don\u2019t know where the bottom is and when they\u2019re going to it,\u201d said John Crossman, president of Crossman & Co. They are waiting to see \u201cwhere this lands and what the next step looks like.\u201d CB Richard Ellis Inc.\u2019s third quarter MarketView report pits Orlando\u2019s vacancy rate 12 percent in the third quarter. Cushman & Wakefield Inc.\u2019s figure, however, trends somewhat higher. Orlando\u2019s third-quarter vacancy rate experienced a year-over-year uptake of 4.1 percentage points to 15.8 percent, a reflection of thinned tenant demand and the completion of more than 1.5 million square feet–more than half of which is unoccupied, according to Cushman & Wakefield\u2019s third quarter MarketBeat report on the Orlando office sector.The report also maintains that Orlando\u2019s CBD market–with a 16.2 percent vacancy rate–fared slightly worse than its non-CBD counterpart–with a 15.7 percent vacancy rate. A chunk of the difference between the rates is attributable to a large vacancy that occurred in the SunTrust building last year that has yet to be filled and the completion of the Dynetech Centre, which still has about one-third of available space, noted Stephanie Lockard, research director for Cushman & Wakefield\u2019s Orlando office.But it\u2019s the occupancy level of Class C properties that has been particularly bruised. Vacancy among Class C assets realized the sharpest increase–9.3 percentage points to 22.3 percent–as smaller shops, the firms that often gobble up this type of lighter-priced space, struggle to cope with the current economic strain, the Cushman & Wakefield report notes. Additional figures contend that absorption ticked negative 996,161 square feet, a marked change from the positive 137,000 square feet notched the same period one year ago. Among submarkets, Lake Mary has the strongest vacancy rate at just 8.3 percent, followed by East Orlando (10.7 percent), Maitland Center (11.4 percent), South Orlando (12 percent), Downtown (13.6 percent) and North Orlando (16.2 percent), according to the CB Richard Ellis report.As tenants struggle to operate effectively amid a time of economic uncertainty, sublease activity has drifted upward. There\u2019s a lot of sublease space, thus competing with either first-generation space or second-generation space,\u201d said Paul Partyka, president & managing partner of NAI Realvest. \u201cSo, especially in the sublease category, there are a lot of aggressive rates.\u201dFor his part, Bill Moss, senior managing director for CB Richard Ellis, takes a similar stance. \u201cMajor tenants in some cases decrease their occupancy needs, and that\u2019s leading to an increased amount of subleased space,\u201d he said. \u201cThat\u2019s a trend were not only seeing here but around the state and will probably be with us for a while,\u201d he added, citing Miami, Ft. Lauderdale, Palm Beach, Tampa and Jacksonville as additional markets that have seen slowing job growth negatively impact absorption.It\u2019s important to note, however, that once the presidential election is over, regardless of who wins, a level of uncertainty will be extracted, noted Crossman. \u201cIt\u2019s a tenant\u2019s market,\u201d he said. \u201cIf a tenant is looking to expand this is a great time to do that.\u201d Lockard expects the market will start turning around with the next year. \u201cWith everything that happened related to the hurricanes and the housing downturn \u2026 Florida was hit pretty hard,\u201d she said. \u201cNow, we\u2019re starting to see some signs of life here.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Mounting concerns surrounding the health of the economy, meshed with sluggish employment growth, continue to drag down markets across the country. Orlando\u2019s office market–although somewhat buoyed by employment growth experienced in the hospitality and tourism sectors–is no exception. \u201c[People] don\u2019t know where the bottom is and when they\u2019re going to it,\u201d said John Crossman, president…<\/p>\n","protected":false},"author":1314,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[4],"tags":[],"class_list":["post-1003873408","post","type-post","status-publish","format-standard","hentry","category-regions"],"acf":[],"yoast_head":"\n