Industrial Space Expansion Planned Near Florida Mall
A new industrial development is in the works near The Florida Mall, strategically located on two parcels on the south side of West Sand Lake Road in Orlando. This expansion seeks to capitalize on the growing demand for industrial spaces in the area, particularly for smaller industrial facilities.
Location and Ownership
The proposed warehouse project is set to sit on a 6.7-acre property owned by PRN Real Estate & Investment LTD and WGML Investments LTD, both of which are based in Altamonte Springs, Florida. This central location near The Florida Mall provides an advantageous position for both logistics and accessibility to key markets within Orlando’s bustling economy.
Project Details
The planned warehouse is expected to span 86,065 square feet. However, the application has not yet disclosed whether it will be designed for a specific tenant or serve as a multi-tenant property. The flexibility in usage could potentially accommodate varying business needs, catering to both small enterprises seeking industrial bays under 50,000 square feet and others looking for more extensive facilities.
Market Demand for Smaller Industrial Spaces
The Orlando area has been witnessing a particular demand for smaller industrial spaces while larger facilities face rising vacancy rates. According to Lisa McNatt from CoStar Group, there is a noticeable shortage of smaller bay industrial spaces in regions like Orlando and Tampa. This demand underscores a strategic opportunity for developers to fill a market gap and cater to companies that require compact, efficient spaces for their operations.
Market Trends in Orlando
While large industrial spaces have been struggling with higher vacancies, smaller footprints remain in high demand. Orlando, along with the Interstate 4 corridor, has experienced a significant surge in new industrial construction, adding over 10 million square feet every quarter since early 2023. This persistent development indicates a robust interest from both investors and tenants in smaller-scale industrial projects.
Vacancy Rates and Absorption in the Area
The region has seen changes in vacancy and absorption rates, reflecting broader market dynamics. Orlando’s overall industrial vacancy rate rose to 8.9% in the third quarter, marking a 2.8% increase from the previous year. In southwest Orange County, where the new property is proposed, 51,702 square feet of industrial space was absorbed over the quarter, though the area encountered negative absorption of 272,511 square feet year to date, indicating a complex and evolving market landscape.
National Context of Industrial Market
This localized shift is part of a larger national trend. Data from Savills indicates that the U.S. industrial market is experiencing a cooling phase, with the national vacancy rate reaching 7.4% in the third quarter of 2024. Despite this cooling, the demand for smaller industrial facilities remains robust, both regionally and nationally, as businesses seek more optimized and adaptable spaces.
Conclusion: Bridging the Development Gap
Developers have traditionally leaned towards large-scale distribution projects, a trend accelerated by pandemic-related demands. However, this has inadvertently created a shortage of smaller industrial spaces. The planned development near The Florida Mall is poised to address this imbalance, tapping into the high demand for versatile industrial spaces. As Orlando continues to grow, initiatives like these highlight the city’s burgeoning status as a pivotal industrial hub within Florida.
