Free Rent Gone in Tight Service Space Market

ORLANDO-Free rents have vanished from the area’s 7.9-million-sf service center and flex space market as new construction slows and net absorption swells to 314,900 sf in the second quarter, reports Winter Park, FL-based Rebman Properties Inc. Occupancy is at 92%, equating to an overall vacancy rate of 7.7%, the second lowest percentage on record.

“The record-breaking absorption is the big story” in the second-quarter performance of the 88-building market located south of the 408 Expressway, says Lyle N. Nelsen, Rebman’s corporate and industrial specialist. He has compiled the quarterly statistics since 1986. Nelsen forecasts a total 700,000 sf will be leased for the entire year. First half absorption totaled 399,174 sf.

“It’s a landlord’s market with landlords afforded the luxury of being choosy in selecting credit-worthy tenants and no more free rent,” Nelsen says. “Modest improvements will be included and expansion tenants will take priority.” For brokers representing space-hunting clients, the current market is “a challenge, but what else is new in this business?” Nelsen says.