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I-4 rebuilding shaking up Greater Orlando's office market

I-4 Ultimate Improvement Project workers with heavy machinery demolished a closed portion of the eastbound lanes of Interstate 4 at Lake Ivanhoe Blvd. in Downtown Orlando, in this photo from February.
I-4 Ultimate Improvement Project workers with heavy machinery demolished a closed portion of the eastbound lanes of Interstate 4 at Lake Ivanhoe Blvd. in Downtown Orlando, in this photo from February. (Red Huber / Orlando Sentinel)

The rebuilding of Interstate 4 for the next six years threatens to create a sea change in Orlando's office market, one that could alter future development, expansion and communities.

Driving on I-4, onerous before construction began in February 2015, has become impossible at times for daily commuters. This is spurring business owners to think of relocating to less congested areas or curtailing growth plans. At the same time, new construction — since offices are generally built along major arteries — is being reconsidered and shifts in population are being talked about.

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"It has become a major issue," said Jamie Barati, managing director at brokerage Cite Partners. 

One area feeling the impact most acutely is Maitland, which is experiencing considerable I-4 work and where drive times to Downtown Orlando have been drawn out considerably.

This is creating difficulties for the thousands of people who work at Maitland Center which, at 7 million square feet, is the area's largest suburban office park.

The bottlenecks could spark relocation to less congested areas, and workforces tend to follow those moves, Barati said. "It's a major point for office users and decision makers to consider."

And since the work recently started and will last another six years, "It's the tip of the iceberg before it will get worse," he added.

The 21-mile I-4 "Ultimate" expansion project could be producing a negative economic impact on the area, because some businesses that want to expand may opt to stay put, because their new quarters would be too close to the disruptive roadwork.

Barati recently worked with a technology company that was interested in moving to Maitland Center. He drove the client down from Lake Mary, and by the time they finally arrived the client said "Never mind," because all of the traffic they had just driven through, Barati said.

In another case, a different tech company was looking at a building on I-4, on the north side of downtown, in hopes of expanding from about 2,500 square feet to roughly 6,000 square feet. The noise from construction scotched any deal, Barati said.

As for new building along I-4, developers may expect difficulties.

"The sub-markets will have a tougher time getting new deals signed," Barati said. "We're not going to see any new development in the I-4 area any time soon. It is even going to be difficult from a spec perspective."

A shift in office space use may occur as businesses that are now near I-4 choose areas that are still close to main roads, contain residential centers and are largely established.

Barati named the SouthPark Center off John Young Parkway, the Quadrangle office park near the University of Central Florida's main campus and Central Florida Research Park as potentially picking up tenants.

"It's a mess," said Todd Davis, managing director of office services for Colliers International.

Davis recently got the distinct impression that one of his clients was backing away because of proximity to the construction.

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A government agency was considering offices at Kirkman Point and ended up going to SouthPark, which is in southeast Orlando, further from the fray, he said.

The $2.3 billion I-4 project is the largest infrastructure project in the Florida Department of Transportation's history. It involves rebuilding 15 major interchanges, widening 13 bridges, adding 53 new bridges and replacing 74 bridges.

Aside from the road work, which includes 2.25 million square feet of bridge deck that will be poured in the Downtown Orlando section of the project (enough to cover nearly 30 soccer fields), there will be a considerable noise factor.

Some 1.74 million linear feet of piles will be driven into the ground to support bridges, overpasses, ramps and other structures. If placed end to end, they would stretch from Jacksonville to Pensacola.

Have a tip about Central Florida development? Contact me at ktalley@growthspotter.com or (407) 420-5176. Follow GrowthSpotter on FacebookTwitter and LinkedIn.

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