Polk County with a Special Lake County Update
Our Commercial Market Report provides verified sales data for properties in Polk and Lake counties along the I-4 Corridor. In addition to expert economic trend analysis, the report covers the Top 10 Sales in:
Analytics, qualified sales for Q2 2019 in the Orlando market included two large sales. The first was 162,092 SF at $96 per SF and the second was 185,000 SF at $80 per SF. The first property was a high bay warehouse and the latter was flex space with 18-foot clear ceiling height. Median cap rates for the quarter were 6.0 to 6.1%.
The economy remains hot and new jobs mean new demand for commercial real estate. Polk’s Professional and Business Services (P&BS) jobs were most dramatically impacted by the Great
Recession but have surpassed prerecession numbers in recent years. In the past three years, growth in P&BS has been booming, but it is important to remember
that companies are shrinking their office footprints and using space more efficiently. Polk’s Financial Activities,
another core office user, has seen more moderate growth.
Florida retail sales are bolstered by Florida visitors. Tourism is at record levels and is increasing, so our state’s retail sales growth will continue to be higher than the nation. Increased retail sales mean increased demand for retail real estate and translates into growth in SF and increased rent which leads to higher prices. An indication that retail sales in Florida outperform the nation is that there are almost 20% more retail trade jobs in Florida than the national average. Polk County retail real estate totals about 34 million SF, which amounts to about 49 SF per person, and is consistent with the national average. Total retail SF is growing by about 2.5% which is consistent with a population growth of over 3%.
Yardi reports national rents are up 2.9% for the first nine months of the year, and the full-year rent growth should hit 3% for the 6th time in the last 7 years. Reis is currently reporting Orlando with a 5.6% vacancy factor, and Tampa at 5.0%. When measured against the long-term national acancy averages of 5.2% to 5.4 %, and given these two local markets are somewhat higher than the recent national vacancy rate of 4.7%, the Orlando and Tampa markets are still quite strong considering all of the new product that has been brought forward over the last several years.
Please note that there is a considerable delay between the close of the quarter and when the data included in this report becomes available. This is our most recent quarterly report.