Demand for industrial buildings continued to show significant momentum in the Orlando area in the third quarter, with institutional investors taking major stakes and driving a record year for sales.
Large investors like Exeter Property Group of Pennsylvania, Gramercy Property Trust of New York and MDH Partners of Georgia have been doing considerable buying this year, prompting brokerage Cite Partners to say 2015 will go down in the record books for the amount of sales and the number of transactions.
"Orlando is an appealing market and these investors believe they will be able to increase rents," said Wilson McDowell, managing director and principal at Cite Partners.
Through the third quarter there had been 74 transactions with a value of $228.36 million, Cite said. They include the Eisenberg Group spending $29 million for its sixth Orlando industrial property and Coreslab paying $1 million for industrial space in Leesburg, both reported first by GrowthSpotter.
That kind of trajectory should top last year's record of 78 transactions and has already beaten last year's $156.82 million in sales.
Cite's look at the third quarter spans Orange, Seminole, Lake and Osceola counties and with the strong sales come a number of other positives, the brokerage said.
Industrial building is a category that includes manufacturing, warehousing and distribution and, "There is still a lot of pent up demand by companies that want to own their properties rather than continue leasing them," which spurs sales, McDowell said.
And while there were no new industrial construction starts in the third quarter, several announcements have been made that indicate buildings should start construction in the fourth quarter. Additionally, there are seven buildings under construction and several land sites are currently under contract to be purchased, so the potential for new inventory remains strong, McDowell said.
Continued demand was demonstrated, with 798,232 square feet of positive net absorption occurring during the quarter as several leases over 50,000 square feet were completed, said McDowell.
One thing McDowell is doing is watching "the amount of new construction. Right now, there seems to be a good equilibrium between supply and demand, but you have to keep your eye on it."