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2022 North America Industrial Big Box Review & Outlook: Central Florida

March 11, 2022 5 Minute Read

Central Florida, comprised of Tampa, Orlando and Polk County, benefited as much as any secondary market in the country from the uptick in e-commerce demand. With consumers demanding delivery times as short as two hours, products are being redirected from the traditional Atlanta distribution hub to the Central Florida region. This shift has dramatically increased industrial demand throughout Central Florida.
David MurphyCBRE Executive Vice President


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More than 5 million people live within 50 miles of the region’s core, with a 9.4% expected growth rate over the next five years—the highest of any region in the Southeast. Within 250 miles, occupiers can reach 21 million people or 8.3 million households.

Figure 1: Central Florida Population Analysis

Image of data table and chart

Source: CBRE Location Intelligence.

According to CBRE Labor Analytics, the local warehouse labor force of 72,040 is expected to grow by 10.7% by 2030. The average wage for a non-supervisory employee in Central Florida is $14.20 per hour, 4.8% lower than the U.S. average and the lowest in the nation.

Figure 2: Central Florida Warehouse & Storage Labor Fundamentals

Featured statistics with text and icons

Source: CBRE Labor Analytics.
*Median wage (1 year experience); non-supervisory warehouse material handlers.

Location Incentives

Over the past five years, there have been 108 economic incentives deals totaling more than $88 million at an average of $6,460 per new job in the Tampa and Orlando metropolitan areas combined, according to Wavteq.

According to CBRE’s Location Incentives Group, among the top incentive programs offered in metro Tampa and Orlando is the Quick Response Training grant, which provides funding to new and expanding businesses in Florida to train new full-time employees. Businesses that are awarded grant funding are typically in high-skill industries, produce exportable goods and services and have wages that are 125% above the state or local average.

Florida also offers the Capital Investment Tax Credit (CITC) and High Impact Performance Incentive (HIPI). CITC is a corporate income tax credit for businesses that make a minimum investment of $25 million and create at least 100 new high-paying jobs, while HIPI is a cash grant for businesses that make a minimum investment of $50 million and create at least 50 new high-paying jobs.

Figure 3: Central Florida Top Incentive Programs

Source: CBRE Location Incentives Group.
Note: The extent, if any, of state and local incentive offerings depends on location and scope of the operation.

Logistics Driver

Central Florida provides many logistics advantages to reach the entire state of Florida and beyond. The region is home to two international airports (Tampa and Orlando) with growing air cargo handling capabilities. Work is underway on the I-4 Ultimate Project, which will improve truck flow throughout the region. The region’s biggest logistics advantage is its rail capabilities. CSX Central Florida ILC is an innovative facility that can process 300,000 containers annually and has the ability to increase capacity.

The region's biggest logistics advantage is its rail capabilities.

Image of railroad

Capital Markets

Central Florida has established itself as the logistics hub for statewide distribution, generating increased demand from institutional investors and fueling increased sales volume in 2021. Continued cap rate compression is expected, with Class A core profile offerings expected to trade at sub-4% cap rates in 2022. With rents increasing almost 10% year-over-year, land prices skyrocketing and supply constraints from both limited land availability and difficulty sourcing construction materials, the Central Florida region will continue to see rising prices in 2022.
David MurphyCBRE Executive Vice President

Figure 4: Cap Rate Comparison

Chat of year over year percentage changes

Source: CBRE National Partners.

Supply & Demand

Most of Central Florida’s 100 million sq. ft. of existing inventory is comprised of facilities of under 500,000 sq. ft. A large amount of preleased space was delivered in 2021, increasing net absorption to 3.7 million sq. ft. and lowering the direct vacancy rate by 1.1 percentage points to 6.8%. First-year taking rents rose to $5.60 per sq. ft., 15% higher than 2020.

Construction completions totaled 5.7 million sq. ft. last year and were dominated by facilities under 500,000 sq. ft. Another 5.0 million sq. ft. is currently under construction. Despite interest from occupiers to set up regional distribution hubs in Florida, there currently are no facilities under construction that total more than 750,000 sq. ft. The approximately 2.5 million sq. ft. under construction in the 500,000-sq.-ft. to 749,999-sq.-ft. size range will garner heavy interest and help accelerate leasing this year. Continued interest in facilities of under 500,000 sq. ft. will further lower the vacancy rate and raise taking rents in 2022.

Figure 5: Share of 2021 Leasing Activity by Occupier Type

Multicolored chart

Note: Includes new leases and renewals 200,000 sq. ft. and above.
Source: CBRE Research.

Figure 6: Leasing Activity

Bar chart with text and numbers

Note: Includes new leases and renewals 200,000 sq. ft. and above.
Source: CBRE Research.

Figure 7: 2021 Construction Completions vs. Overall Net Absorption

Image of bar chart

Source: CBRE Research.

Figure 8: Direct Vacancy Rate by Size Range

Image of data table

Source: CBRE Research.

Figure 9: Under Construction & Percentage Preleased

Image of data table

Source: CBRE Research.

Figure 10: Historical First Year Taking Rents (psf/yr)

Note: Includes first year taking rents for leases 200,000 sq. ft. and above.
Source: CBRE Research.

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