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Market Report

Orlando Office Investment Forecast

2020 Outlook

Available Space Sparse; Expanding Development Pipeline Contains More Speculative Projects

 

Robust economic and employment gains bolster office demand. Orlando’s vacancy rate rests at the cyclical low and is among the tightest in the nation as companies moving to and expanding in the market are depleting available office space. Inventory additions in 2020 will reach the highest level in 10 years and include more speculative space. The increase should benefit prospective tenants who have found it challenging to locate large floor plates. Two of the biggest projects underway, KPMG’s Training and Development Facility in Lake Nona and the SunTrust Plaza at Church Street Station in downtown Orlando, were originally expected in 2019, but deliveries were delayed into 2020. SunTrust’s 28-story tower will debut in the second quarter with nearly all of the 220,000 square feet pre-leased. In addition, a sizable portion of the space being vacated by the financial firm in the SunTrust Center is already being backfilled. Demand is not only heightened for Class A inventory, but throughout the metro, new residential development is generating the need for small offices for professionals who service the growing population. Increased leasing has reduced Class B/C vacancy into the single digits in most submarkets and is pushing rent higher.

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