ORLANDO—As the year was winding down, Steven McCraney, CEO and president of McCraney Property Company, saw a significant amount of large industrial leases being signed and a number of large parcels being sold for development in the past month. Much of this activity is taking place in Central Florida, the hub of distribution for the State.
"While most years we see the activity begin to dwindle near year's end, it was surprising to see so many transactions come together as the year rolled to a close," McCraney tells GlobeSt.com. "It is a good sign that demand and the strength of the market will continue in 2016."
McCraney reports industrial lease rates are still not at the highs of 2006 and 2007. That means there is still room for growth. However, he doesn't anticipate seeing rates rising much higher in the new year as they are currently.
"With regards to construction, costs are going up throughout Florida," McCraney said. "In Central Florida, this can perhaps be attributed to the I-4 project which is absorbing a tremendous amount of the market's resources, causing brow-raising rises in labor even more so than materials."
McCraney also points to another factor: tenant improvement costs. With these costs growing so appreciably, he says, many developers are considering refraining from the build-out additional tenant spaces.
"With rents where they are today, if tenant costs cannot be absorbed within one year's rent, it isn't wise to build out tenant space," McCraney concludes. "If investors and developers continue to make wise decisions, there will be much to be reaped in 2016's demand-driven market."
McCraney Property Company just broke ground on the only spec industrial new construction building in Davenport, FL. The location is significant because it sits at the crossroads of Tampa, FL and Orlando. Click here to read more about that industrial project.
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