Central Florida Industrial Market Report
Tampa Market Overview
While Tampa has recently noted fluctuations in its population, Pasco and Hillsborough counties were two of the top three counties for the most population growth in Florida. Both counties noted an increase of 46,000 residents from July 2022 through July 2023. Also, Tampa marked a 1.6% increase in its employment rate with the addition of 23,900 jobs from May 2023 to May 2024. The education and health services sector led the way for these job additions.
Tampa Market Performance
Several moveouts in Tampa have led to the current vacancy rate of 5.6%. This is the highest vacancy rate the market has noted in eight years. In Q2 2024, three separate companies left their properties, leaving behind a total 740,000 square feet of vacant space. The metro may face challenges in filling up these spaces, due to the majority of leasing activity targeting properties smaller than 100,000 square feet. These smaller facilities have also made up a large portion of sales activity, noting nine sales throughout the past 12 months.
Tampa By the Numbers
- Vacancy Rate: 5.6%
- Rent Growth: 4.3%
- Deliveries in SF: 4.4M
Last 12 Months | Source: CoStar Group
Orlando Market Overview
Orlando recently ranked within the top five of the 50 largest metros nationally for its GDP performance. This standout metric is attributed to the metro’s construction, real estate, and retail sectors, which marked the most improvements in job gains. Its population continues to grow, with an influx of more than 11% of its population being seniors moving to the area throughout the last five years.
Orlando Market Performance
Absorption in Orlando has not been able to keep up with the high amount of developments. Leasing activity and absorption during the first half of 2024 did not align with previous years, as both metrics declined. However, Orlando is noting strong demand for buildings greater than 50,000 square feet. So far this year, more than 50% of leasing has been for industrial buildings with this specific square footage. A lease from Cencora for a 328,074-square-foot property in the SE Orange County submarket during Q124 marks the largest lease so far this year.
Orlando By the Numbers
- Vacancy Rate: 6.7%
- Rent Growth: 7.3%
- Deliveries in SF: 9.6M
Last 12 Months | Source: CoStar Group
St. Petersburg Market Overview
The St. Petersburg submarket is home to a variety of industries, including tourism, healthcare, education, and technology. It also boasts a notable industrial sector, with over 59 million square feet of industrial space. Due to its large amount of industrial spaces, it has previously ranked as one of the top-performing industrial markets in the region.
St. Petersburg Market Performance
The current vacancy rate of 4.8% is attributed to the metro noting several moveouts. Due to this, vacancy is greater than 4%, which hasn’t occurred since 2020. However, construction is slowing down, with only 530,000 square feet currently underway. Most of the construction that will be delivered is greater than 100,000 square feet. Similar to this construction trend, two leases this year have been for properties 100,000 square feet or above.
St. Petersburg By the Numbers
- Vacancy Rate: 4.8%
- Rent Growth: 3.8%
- Deliveries in SF: 468K
Last 12 Months | Source: CoStar Group
Sarasota Market Overview
Although the metro noted a strong boost to its population directly after the pandemic, in-migration metrics have begun to decline. Yet, Manatee County noted the majority of population growth, with 12,000 new residents relocating here over the past year. While the unemployment rate increased to 3.0% in May 2024, Sarasota noted the strongest gains in jobs to its education and health services segment.
Sarasota Market Performance
Over the past 12 months, Sarasota’s vacancy rate increased due to supply outpacing demand. There has been 380,000 square feet delivered over the trailing 12 months, with another 2.0 million square feet still under construction. Properties under 25,000 square feet are seeing the most construction. There are currently 13 properties underway that match this square footage, and they are scheduled for delivery in Q4 2024 and into early 2025. These smaller facilities are also noting the most leasing activity. There have only been three leases in the past 12 months for properties over 25,000 square feet. The majority of leasing activity has been spread out in the Manatee submarket.
Sarasota By the Numbers
- Vacancy Rate: 4.2%
- Rent Growth: 4.8%
- Deliveries in SF: 386K
Last 12 Months | Source: CoStar Group
Lakeland Market Overview
Lakeland’s location in Polk County makes it a standout metro for population growth, due to Polk County leading the U.S. in in-migration metrics from July 2022 through July 2023. The metro is attractive to new residents for its affordable multifamily rental price, as well as a variety of different companies located here. Specifically for industrial firms, Lakeland’s central location on the Interstate 4 Corridor provides a convenient area for industrial facilities.
Lakeland Market Performance
Vacancy for industrial properties in Lakeland has increased, due to new construction being greater than tenant demand. The current vacancy rate of 8.4% is a decade high for the metro. However, as of 2Q 2024, leasing activity began to increase, with 1.8 million square feet absorbed. Walmart stands out for the largest lease in this timeframe when it took over 815,000 square feet of space in June. Additionally, sales volume also marked an uptick in 2Q 2024. Over $100 million in sales activity was noted during this span, which is the first quarter in almost two years where sales volume surpassed $100 million.
Lakeland By the Numbers
- Vacancy Rate: 8.4%
- Rent Growth: 5.6%
- Deliveries in SF: 2.2M
Last 12 Months | Source: CoStar Group
Kissimmee Market Overview
Industrial facilities in Kissimmee have been on the rise, with 1.0 million square feet of new logistics properties being added over the last 12 months. The influx of these new logistics properties boosted inventory by 1.2%. Most buildings that delivered during this timeframe were added to Kissimmee’s industrial inventory that is under 75,000 square feet.
Kissimmee Market Performance
With the increase in new industrial properties, vacancy rose by around 300 basis points to the current vacancy rate of 5.4%. The absorption of 890,000 square feet was not able to keep up with the delivery of 1.0 million square feet to the metro. However, deliveries have begun to slow down with 130,000 square feet undergoing construction.
Ten new facilities were delivered in the metro as of 3Q24, and there are only two scheduled for completion in 2025. Sales volume in Kissimmee has also slowed down, with 11 properties changing hands throughout the past 12 months. Private buyers make up the majority of sales activity here, accounting for 80% of trades.
Kissimmee By the Numbers
- Vacancy Rate: 5.4%
- Rent Growth: 6.5%
- Deliveries in SF: 1.1M
Last 12 Months | Source: CoStar Group
Sanford Market Overview
Absorption for industrial properties here has been weak, with -317,000 square feet in absorption over the past 12 months. Supply has outperformed demand here as 170,000 square feet was added, while absorption was not able to keep up. However, the vacancy rate is projected to decrease going into 2025 as less than 30,000 square feet is in the pipeline.
Sanford Market Performance
The lack of absorption can be due to the buildings currently up for lease being older than 20 years. Despite the negative absorption metrics, logistics facilities have led the way for absorption with 120,000 square feet absorbed during the past 12 months. Two properties are scheduled for completion in November, but after that, nothing will be delivered until March 2025. Flex spaces have also stood out here as these properties made up $83.5 million in last year’s sales volume. Private buyers accounted for the majority of sales volume during this timeframe.
Sanford By the Numbers
- Vacancy Rate: 5.7%
- Rent Growth: 6.9%
- Deliveries in SF: 187K
Last 12 Months | Source: CoStar Group
