Lack of Inventory Doesn't Hamper Industrial Market

Lee Morris has his eyes

ORLANDO—Central Florida’s industrial market is thriving despite a lack of inventory. That’s the overarching conclusion of Colliers International Central Florida ‘s Fourth Quarter 2015 Research & Forecast Report. According to the report, the fourth quarter of 2015 was the first time during the year that the dollar value of consumer goods inventories held in warehouses became greater than in retail facilities. That trend, the firm said, was likely caused by the shift in supply chains and how consumers are purchasing more goods through e-commerce. Lee Morris , managing director of industrial services for Colliers International, tells GlobeSt.com he expects this trend to continue. However, he adds, this still represents a relatively small percentage of the overall warehouse space. “Also much of the space that serves e-commerce is fundamentally different space then the standard industrial building and therefore requires new construction,” Morris says. “Therefore, we are starting to see a new category of buildings with special amenities that cater to the needs of e-commerce in addition to the more standard new industrial space that offers many amenities over older buildings such as ESFR fire sprinklers, higher clear heights, more loading doors and trailer storage. The gulf between these newer buildings and the older buildings that do not offer and many that cannot be updated has grown significantly in this cycle.” During the fourth quarter, the overall net absorption in Central Florida’s industrial market was 301,652 square feet, according to Colliers. The most active submarket was Southeast Orange, the firm reports, with 202,913 net square feet absorbed during the fourth quarter. The Southeast Orange submarket also reported the most net absorption in 2015 with a total of 988,901 square feet. The Northeast Orange submarket held steady with the region’s lowest vacancy rate once again, at 4.2%, compared to the region’s total reported vacancy at 7.8%. Meanwhile, the Seminole County submarket had the region’s highest vacancy, 10.9%. Overall, the firm reports, leasing activity in the Central Florida industrial market remained active during the fourth quarter. The Southeast Orange submarket saw the most activity and remained attractive to industrial tenants, particularly those seeking space for regional distribution centers. Industrial space in the 20,000 to 50,000 square foot range was highly sought after by warehouse tenants. New industrial inventory is coming to market. There’s movement one of the largest new speculative industrial projects along the Interstate 4 corridor in Lakeland. Avison Young was just picked to handle leasing for the class A 275,226 square foot building under construction at Bridgewater Commerce Center.