Moses Salcido, a principal with Southern Commercial, puts the value of the lease at $450,000, or rougly $3 per square foot annually, with no tenant improvement allowance. He says Entertainment Retail, which makes promotional items for corporate clients, sought to consolidate two locations into a single building near Orlando International Airport.
"This is a unique building that has probably a larger block of space than is normally available in that submarket," Salcido tells GlobeSt.com. He adds that the tenant preferred locating in another part of Orlando but the deal for the building at 2437 E. Landstreet Road, was too good to pass up.
The Southeast/Airport submarket has total industrial inventory of 13.1 million and a midyear vacancy rate of 24%, according to Cushman & Wakefield. Asking rents in the submarket average $5.62 per square foot for warehouse/distribution and nearly twice as much for flex space.
Realistically, landlords are having to accept whatever rents they can get for vacant industrial space, Salcido says. In fact, some are asking prospective tenants to make an offer on space, rather than quoting a particular rate.
"This isn't the market to go by pro forma," he says. "Owners are more focused on the downside than the upside lately."
Salcido, a 22-year commercial real estate veteran who joined Southern Commercial in June, represented landlord DCT Industrial in negotiating the lease. Lou Payas with USAA Real Estate represented Entertainment Retail.
Southern Commercial currently represents 6.9 million square feet of industrial inventory within the Orlando market. The company, which was founded in August 2007, has completed more than 100 industrial and office transactions totaling 2.8 million square feet and valued at $107 million over the past two years.
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