Q3 2022 Orlando Market Report
With a recession looming and the hybrid work from home workforce disrupting occupancy, the office market has been at a standstill. Vacancies are slowly creeping up as leases expire with some not renewing and others downsizing. While we have had some corporate relocations, they are nothing like those in the Miami, West Palm Beach and Tampa MSAs. Overall, our vacancy rates are roughly 4 percentage points below the national average with rental rates rising 2.8% year over year.
Activity is up marginally from last year as most companies now have a game plan moving forward on whether to fully go back to the office or implement a work from home strategy. With the Fed pumping the brakes on the economy by raising interest rates, it is unlikely we will see high absorption for the remainder of the year and much of 2023. Fortunately for Orlando and the Sunshine State, population growth is high, and tourism remains elevated, so any recessionary effects will be diminished in our local economy.
The industrial market continues its torrid pace with continued development—both speculative and build to suits. Rents are at historic highs and absorption remains positive. No signs of slowing down, but it remains to be seen if the nearly 4M square feet of new deliveries will be absorbed at the current pace.