Net absorption is averaging 800,000 sf per quarter with a nine-month absorption tally of 2.55 million sf. What the Orlando industrial market could use, however, are more spec warehouse and distribution projects in the 25,000-sf to 50,000-sf range to accommodate smaller users, according to a third-quarter study by Grubb & Ellis Co. Developers are largely ignoring the little guy to focus on big-box projects for national clients.

"Although we are seeing an extensive amount of new construction (1.4 million sf in the third quarter), the product being built serves the needs of flex space users and large, 150,000-sf-plus warehouse/distribution tenants," Shelton says. The shortage of smaller product is triggering an active built-to-suit category.

Rents are all over the place. verall warehouse/distribution rents are down while R&D/flex rates are up from second quarter. Average asking warehouse/distribution rent is $4.37 per sf, down nine cents. Average R&D/flex space is $8.01 per sf, up 13 cents. "Look for rental rates to fluctuate as developers use incentives to attract new tenants and retain existing tenants," predicts Shelton. "While demand remains strong, we do not anticipate a trend of declining rates."