Orlando MSA Industrial Real Estate Market Overview
Large Industrial Tracts Scarce

March 2007

General

Developable industrial land remains scarce in Central Florida, resulting in increased prices for available land. When the increased price of vacant industrial land is combined with increased construction costs, entitlements, increased property taxes, high energy costs, raised insurance premiums and labor costs, this creates a competitive market, which results in increased rental rates.

Average industrial space rental rates were slightly higher in the 4th quarter 2006: $5.38 for warehouse space and $12.90 for flex space. These rates have increased from $5.21 and $12.21 respectively in the previous period. (Orlando Business Journal - January 5, 2007)

Cushman & Wakefield Research Services reports 4th quarter figures reflect 474,468 square feet under construction and another 1.7 million square feet on the books. The YTD net absorption is 2,851,682 square feet and the overall vacancy rate is 6.0%.

The bulk-warehouse market in Orlando closed last year with an 8.5 percent vacancy rate, up slightly from the third quarter's 8.02 percent rate, according to Greg Rebman of Rebman Properties in Winter Park. Rebman noted that vacancy levels have been on the rise, up from 5.37 percent in the first quarter of last year. The broker's survey found 451,000 square feet under construction at the close of the year. Rebman surveys 122 buildings totaling more than 15 million square feet. (Central Florida Business - February 5, 2007)

The Orlando MSA offers solid, long-term potential for developers and investors of industrial real estate due to strong market fundamentals:

• Demand continues to outpace the existing supply of industrial buildings.
• The Metro Orlando economy has been ranked among the strongest economies in the U.S.
• Growth in research and development projects for 2007 and 2008.
• 20% of the state's residents populate Central Florida.
• Metro Orlando added more than 44,000 jobs last year and ranks 5th in the nation's largest labor markets, with the local unemployment rate falling to 2.9%.
• Florida is a "right to work" state where organized labor does not have a significant impact on the area's prevailing wage rates.
• Florida's corporate tax structure consists of a flat rate of 5.5% on all corporate income, which ranks 8th lowest among states that tax corporate income.
• The Orlando MSA is located at the convergence of most of the major roadways in the State of Florida, making the area ideal for large, regional warehouse/distribution facilities.
• With two international airports in the MSA (Orlando International and Orlando-Sanford International), manufacturing and distributing companies locating near Orlando are able to access excellent air cargo facilities, giving them the potential for overnight shipment of their products to virtually any point on the globe.

New Development

The Airport/Southeast submarket is experiencing the most development with Liberty Property Trust's two new speculative buildings, totaling 296,100 square feet. under construction at Airport International Park of Orlando and another 115,000 square feet in three buildings being built in Beachline Industrial Park.

Two large build-to-suit buildings are the 550,000 square foot Whirlpool Distribution Facility at Orange Avenue and SR 417 and the 325,000 square foot WinDoor Manufacturing Facility located on Aerospace Parkway in Southeast Orange County.

Sealy Mattress Manufacturing is constructing a 225,000 square foot facility on Jetstream Drive in Jetport Industrial Park of Orlando. The park is just south of Orlando International Airport. The developer is Seefried Properties.

Other proposed projects to begin are the 233,700 square foot Crossroads VII at 301 Gills Drive, scheduled for third quarter delivery, and McCraney's Regional Airport Center on Parkline Boulevard, which is comprised of three buildings totaling 122,000 square feet. Both projects are located in the Airport/Southeast submarket.

The Southwest submarket currently has 973,000 square feet of speculative spaced planned in Crownpointe Commerce Park on Kingspointe Parkway: the 89,754 square foot Crownpointe IV; the 151,720 square foot Crownpointe V; and the 101,342 square foot Crownpointe VI.

Sales

The Longwood Business Center, a multi-building complex on State Road 434 in Seminole County, has sold for $16.68 million. The sellers were a partnership comprising the Praedium Fund of New York and local investors Cliff Stein and Reid Berman of Tower Realty Partners in Maitland. The new owner is Longwood Flex LLC of Orangedale, Calif. (Orlando Sentinel - January 4, 2007)

Bello Monte Properties purchased a 5,000 square foot warehouse at 104 Baywood Avenue in Longwood for $375,000. Chuck McNulty of McNulty Group, Inc. represented the seller in the transaction.

Stein, Berman and the Praedium Fund recently sold the 82,581 square foot Eastpointe Business Center at 7033 Staypoint Court in Winter Park for $6.36 million. The buyer was Eastpointe Business Center LLC.

South Seminole Fabricators Inc. bought the 43,700-square-foot warehouse at 3055 Clarcona Road in Apopka for $2 million. The seller was Greiling Farms Inc. Steve Porter of Coldwell Banker Commercial NRT and Chuck McNulty of the McNulty Group handled the transaction. (Central Florida Business - January 15, 2007)

Ron Rogg of CB Richard Ellis in Orlando participated in the recent transaction involving the 315,000-square-foot Oakridge Office Park in south Orlando. Rogg represented the seller, Harbor Group International. The property sold for $23.67 million, or $75.14/SF. (Central Florida Business - October 9, 2006)

The 9,400-square-foot building at 6860 Edgewater Commerce Blvd. in Orlando sold for $1.15 million, or $122.34/SF. The buyer was Dismas Charitie of Louisville, Ky. The seller was KRB Management Inc. Heidi Zerivitz of The Bywater Co. and Allison Reynolds of Cushman & Wakefield of Florida were the brokers. (October 9, 2006 - Central Florida Business)

The 8,000-square-foot industrial building at 1151 Central Park Drive in Sanford sold for $885,000 or $110.65/SF. Prestige Flooring & Installation of Sanford was the seller. The buyer was Bolt Enterprises LLC. Michael Heidrich of NAI Realvest and Jeff McDonald of Southern Realty Enterprises negotiated the transaction. (Central Florida Business - September 4, 2006)

Three industrial buildings with a total of 207,000 square feet in the 33rd Street Industrial Park in southwest Orlando sold for $11 million or $53.14/SF. The seller was 33rd Street Consolidated Partners Inc., while the buyer was 33rd Street Properties LLC of Columbus, Ohio. George Livingston, Christie Alexander and Matt Cihocki, all of NAI Realvest Inc., represented the buyer. The seller was represented by Dale Clemens of Clemens Commercial Real Estate. (Orlando Sentinel - September 13, 2006)

Leasing

Summit Electric Supply, an Albuquerque, N.M.-based wholesale electric supply company, subleased 49,600 square feet in the Center of Commerce industrial area on Shader Road in Orlando for 70 months. The facility is owned by RREEF America REIT II Corp. The sub-landlord is Connextions Inc., which leases the entire 187,533-square-foot building. (Orlando Business Journal - February 2, 2007)

Aaron's Country Store, Inc. leased 50,000 square feet at the Greater Marketplace in Casselberry for 5 years. The landlord is Greater Properties, Inc. Jim Coppersmith and Jeff Tanner of Coldwell Banker Commercial NRT negotiated the deal.

Amcor PET Packaging USA Inc., a major supplier of packaging such as plastic bottles and jars, has leased 228,950 square feet of industrial space at 2351 Investors Row in Orlando Central Park in south Orlando. The tenant was represented by Deborah Mickler and Greg Kloiber, both of Colliers Arnold. (Orlando Sentinel - December 5, 2006)

Roma Food Enterprises leased 81,924 square feet of space at 2901 Titan Row in Orlando Central Park. Susan Ruby and Lee Morris, both of Cushman & Wakefield, represented the landlord. Fischer & Co. represented the tenant. (Orlando Sentinel - September 18, 2006)

Quietflex Inc. of Houston rented 65,100 square feet of industrial space at the Christopher Ford Industrial Park in Lake County. Jim Barton of Mohr Partners in Orlando and Susan Ruby of Cushman & Wakefield were the brokers. (Central Florida Business - September 4, 2006)

Heritage Paper Co. of Jacksonville rented 24,867 square feet of warehouse space at 7319 Presidents Drive in Orlando Central Park. Richard T. Davis Jr. and Nick Sands, both of Grubb & Ellis/Commercial Florida, and Gregg Ickes of Trammell Crow Co. negotiated the transaction. (Central Florida Business - July 10, 2006)

Dynetech Corp signed a new lease to occupy 22,000 square feet at Crownpointe III, 7414 Kingspointe Parkway. GVA Advantis Senior Driectors Tom McFadden, SIOR, and Bo Bradford, Jr., CCIM, SIOR, represented the landlord. (GVA Advantis - 2nd Qtr 2006 Market Review)

American Builders & Contractors signed a 55,500 square foot lease at Center of Commerce 917. (GVA Advantis - 2nd Qtr 2006 Market Review)

A&M Supply, serving the wholesale building, cabinet manufacturing, remodeling and store fixture industry, leased 56,093 square feet at 1090 Gills Drive. GVA Advantis Director, Lisa Bailey, represented the tenant. (GVA Advantis - 2nd Qtr 2006 Market Review)