Why Orlando

Contents

OFFICE Q4 2024 ORLANDO

MARKET FUNDAMENTALS

ECONOMY Orlando’s unemployment rate was 3.3% in Q4, marking a slight increase of 20 basis points (bps) compared to one year ago, but still below the national average of 4.2%. Modest job growth persisted, with nonfarm employment expanding by 14,600 jobs, a 1.0% year-over-year (YOY) increase. DEMAND After healthy demand in the first three quarters of 2024, Orlando recorded 414,000 square feet (sf) of leasing activity during Q4. This marked the lowest demand levels of 2024 but was still an 8.9% increase from Q4 2023. Leasing activity in suburban submarkets ended the year with 1.7 million square feet (msf) of new deals signed, down 5.4% YOY, while the Central Business District (CBD) had the highest annual leasing volume since 2019 with 517,000 sf signed, up 90.6% YOY. Tenants continued to target Class A assets with over 1.4 msf signed in 2024, an annual increase of 16.5%. SUPPLY The overall vacancy rate remained unchanged from the previous quarter, with a more significant uptick of 80 bps YOY to 17.0%. The Longwood and

17.0% Vacancy Rate -270K YTD Net Absorption, SF $27.54 Asking Rent, PSF (Overall, All Property Classes)

YOY Chg

Outlook

SPACE DEMAND / DELIVERIES

900

600

0 300

ECONOMIC INDICATORS

-300

Related Insights Cushman & Wakefield Research reports analyze economic and commercial real estate activity including supply, demand and pricing trends at the statewide, market and submarket levels. 1 Orlando Employment 3.3% Orlando Unemployment Rate 4.2% United States Unemployment Rate Source:BLS Airport/Lake Nona submarkets recorded the highest vacancy rates, each at 25.5%. The Longwood submarket recorded a 550-bp YOY increase due to 52,000 sf of net occupancy losses in Q2 2024, while the Airport/Lake Nona submarket had a 40-bp decline. The Winter Park submarket continued to record the lowest vacancy rate at 4.5%, falling 290 bps YOY. Orlando netted 19,500 sf of absorption during Q4, bringing the 2024 total to -270,300 sf. The positive quarterly absorption in Q4 was propelled by Galen College of Nursing occupying 42,145 sf at 12650 Ingenuity Dr in the University/Research Park submarket. The 436 Corridor submarket gave back the most space in 2024, totaling nearly 70,000 sf of negative absorption. The largest move-outs in the 436 Corridor submarket were both by GSA: 32,600 sf at 3535 Lawton Rd and 33,300 sf at 5520 Gatlin Ave. PRICING Overall rents remained relatively flat YOY, posting at $27.54 per square foot (psf). As a higher volume of pricier Class A assets were leased and taken off the market than Class B, Class A asking rents rose by 1.5% YOY to $30.14 psf while Class B rents increased 2.2% to $23.69 psf. However, this imbalance led to Class B vacancies contributing more heavily towards the overall rate, holding it flat. In turn, the delta between Class A and B rents decreased 1.3% YOY. YOY Chg Outlook 1.5M

-600 Thousands

SELECT A TOPIC TO NAVIGATE SECTIONS

-900

2020

2021

Net Absorption, SF Construction Completions, SF

2022

2023

2024

OVERALL VACANCY & ASKING RENT

$28

$27

$26

20%

$25

16%

$24

12%

2020

2021

2022

8%

Asking Rent, $ PSF

2023

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2024

4%

Vacancy Rate

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