The 35-building, 2.6-million-sf University Research submarket in east Orange County, also considered a hot spot with 461,259 sf of new supply, posted a 19.4% vacancy mark, second highest among the nine submarkets monitored quarterly by Advantis.

The 42 buildings Downtown, with rentable inventory of 6.1 million sf, had an overall vacancy of 13.1%. "The most intriguing developments of 2004 may occur Downtown," says DeVore. Local developer Cameron Kuhn has started preparing the 2.29-acre Jaymont Block site for a $140 million, mixed-use venture that will encompass four city blocks in the central business district which has lacked a blockbuster commercial development for 20 years.

On the rent front, average asking base rates are down 19 cents per rentable sf from the end of Q3-2003 to a current $18.85 per sf. "But the decline is not as alarming as it may appear to be at first glance," DeVore says.

She cites Northpoint IV in Lake Mary, built in 2002, where the landlord has lowered the rental rate from $19.75 per sf at yearend 2002 to $16.95 per sf during the fourth quarter of 2003 in an aggressive move to increase occupancy at the largely still-vacant office building.

"The willingness of landlords to concede to more favorable terms seems to depend on the submarket itself," says DeVore. For example, in the Central Florida Research Park area in east Orange County, "landlords are remaining firm on their rates, although free rent of three months on a seven-year deal is not unheard of," the researcher says.