The Real Deal Miami

Brokerage sees solid office markets in Orlando, Tampa and Jacksonville

Avison Young says vacancy rates in the 3 metro markets range from 10.9% to 13%
July 29, 2017 12:00PM

Downtown Orlando

Brokerage firm Avison Young reported solid office markets in Orlando, Tampa and Jacksonville, where the area unemployment rates have fallen below 4 percent.

Among the three metropolitan markets, Orlando has the lowest office vacancy rate, 10.9 percent, essentially unchanged from the end of 2016.

Avison Young also reported that speculative office development remains restrained in the Orlando area, where the unemployment rate was 3.6 percent in May, down from 4.2 percent in the May 2016.

“New space under way will only partially mitigate the pent-up demand as tenant interest remains stead and strong economic fundamentals support continued business expansion,” the brokerage firm said in its Orlando office market report.

The Tampa-area office vacancy rate was 11.9 percent at the end of June, down from 13.4 percent a year earlier, and almost every submarket has recorded positive net absorption of new office space since the mid-2016.

However, a shortage of parking is restraining office development in downtown Tampa, where developers have acquired surface parking lots for multiple residential projects in the city’s central business district.

“A scarcity of parking will continue to present challenges that must be addressed before the downtown core can achieve its full potential,” Avison Young said in its Tampa office report.

The Jacksonville office vacancy rate has fallen to 13 percent from 15.3 percent at the end of 2016. The area unemployment rate is 3.8 percent, down from 4.4 percent a year ago.

Avison Young said in its Jacksonville office market report that sales of office properties for the rest of 2017 are “expected to continue at a healthy pace as the growing economy supports business fundamentals including rising rents, occupancies and cash flows.”