Orlando Office Leasing Declines in 2011 as U.S. Activity Reaches Six-Year High
26 Apr, 2011, Orlando
Cushman & Wakefield today released first quarter 2011 statistics for the U.S. office market that show new first quarter leasing activity in Orlando decreased year-over-year, as new activity for U.S. Central Business Districts (CBDs) reached a six-year high. Leasing in the Orlando CBD totaled 90,588 square feet at the end of the first quarter of 2011, down 18.2 percent from 110,736 square feet at this time last year. Leasing activity in all CBDs totaled 18.2 million square feet in the first three months of 2011 - a 31.9 percent increase from the 13.8 million square feet leased at this time last year - and the highest first quarter total since 2005, when 20.6 million square feet was leased.
With the increase in leasing activity, the U.S. office market registered its second consecutive quarter of positive absorption. Overall absorption - a measure indicating the net change in occupied space - totaled positive 733,161 square feet at the end of the first quarter of 2011, a 114.6 percent increase from the negative 5.0 million square feet in absorption at this time last year. Absorption in Orlando totaled positive 29,631 square feet at the end of the first quarter, in contrast to negative 33,506 at the end of the first quarter of 2010.
Larry Richey, Senior Managing Director, said, "The Orlando CBD office market, like all other major Florida cities, continues to trail the pace of recovery in most major U.S. markets. Ranked 21st out of 31 markets in overall vacancy and 22nd in asking rental rates, the worst does appear to be behind us as net absorption was positive for the third consecutive quarter."
Absorption remained positive despite the 2.3 million square feet of new construction delivered to the market in the first quarter of 2011, which included new developments in Boston, Houston, Orlando and Washington, D.C. However, with CBD inventory increased by 0.2 percent, vacancies edged up slightly. At the end of the first quarter of 2011, the overall vacancy rate for U.S. CBDs was 14.6 percent, a 0.2 percentage point increase from the previous quarter, though still down 0.4 percentage point from 15.0 percent at this time last year. Orlando's vacancy rate remained unchanged at 19.1 percent from year-end 2010.
The overall asking gross rental rate for U.S. CBDs was $35.85 per square foot at the end of the first quarter, a $0.58 per square foot decrease from $36.43 per square foot at the end of 2010. Rental rates for Orlando rose during the first quarter to $24.43 per square foot, up $0.42 from $24.01 at the end of 2010.
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