That second-quarter scenario has hurt leasing activity in the 75-building, 7.3-million-sf service center in south Orange County, says Lyle N. Nelsen, a senior Rebman corporate and industrial specialist. "Condo sales for the large users were not near as attractive," Nelsen says. "If large users were to own their space, they would more likely to build or buy a larger stand-alone building."

Condo sales have affected the service center market's overall vacancy level which stands at 12.03%, up from 11.86% in the first quarter. Many of the condo sales are being done at Crownpointe Commerce Park on Sand Lake Road and in other centers along John Young Parkway and Sand Lake Road. The arrival of three new centers and the loss of three major leases also contributed to the rising vacancy rate, Nelsen says.

New flex buildings added in the second quarter were the 82,000-sf Orlando South Park at 8810 Commodity Dr.; the 70,050-sf Southbridge Commerce V at 2616 Commerce Dr.; and the 34,500-sf Progressive Building at 2256 Taft-Vineland Rd.

Large losses to the service center market included Island One vacating 49,805 sf at Sand Lake Tech; the Orange County Sheriff's Department moving out of 28,000 sf at John Y. Commerce Building; and Underground Brokers leaving 14,882 sf at Lee Vista II.

"Leasing rates are holding steady, although some centers have raised their rates a dollar on renewals and expansions," Nelsen notes. "Very little free rent is being offered" even though "that market is flushed with an abundance of inventory [877,410 sf]." Additionally, 355,127 sf of new product is scheduled to surface this year, Nelsen says. "Orlando's flex market is more than ready for the growth that is to come," he adds.

The market ended the quarter with a positive net absorption of 200,370 sf, but only 17 of the 75 centers posted positive leasing gains. Ten service centers were in the negative absorption territory. The 48 remaining centers showed no change.