According to the report, asking rents will gain 3.5% to $19.51 per sf, while effective rents rise 4.2% to $17.67 per sf. The report also notes that supply is expected to exceed demand in the short-term, which could lead to increased vacancies. However, the balance between supply and demand could reach greater equilibrium before the year ends.
According to a CB Richard Ellis Q4 Orlando retail market report, average asking rents at neighborhood centers are $17.27 per sf, specialty centers $30 per sf, community centers $16.57 per sf, power centers $29.09 per sf, super regional centers $32.96 per sf and mixed-use center $27.08.
Part of the strength of the Orlando retail market is due to the tourism industry. According to the CBRE report, tourism taxes increased 12.3% from the third quarter to $13.6 million in the fourth quarter. There were an estimated 48.9 million visitors to Orlando in 2007, a number that is expected to increase by 3.4% to 50.6 million in 2008. "This strength is due to the weak dollar attracting foreign visitors to the Orlando area by giving them greater buying power," the report states.
CB Richard Ellis first vice president of retail services Wood Belcher tells GlobeSt.com that the tourism industry helps to fuel growth in Orlando retail sector. "We have the draw of Disney which brings international travel and international money," Belcher says. "You also have areas that cater to the time share business."
Belcher predicts slow growth for the remainder of 2008, but didn't believe the vacancy rate would rise sharply due to the delivery of new retail projects. "There will be slow, positive growth but not as crazy as it's been in the past few years," he says.
"Forward-looking property owners may want to accelerate searches for development sites in several areas, including Clermont, Minneola and Groveland in Lake County, as well as along the Innovation Way corridor in east Orlando," says Marcus & Millichap Orlando office regional manager Gregory Matus.
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