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The
Lakeland, Florida office market consists of four sub-markets:
South Lakeland (Polk Parkway), Dixieland, Downtown, and North
Lakeland. Each market offers its own distinct assets and
short comings and each office user needs to select the market
that will suit them and their business best. The current
market has brought challenges for office buildings in each sub
market, however trophy properties in prime locations have been
insulated from these market conditions. The volume of
available class B office space has resulted in deals getting
done at a significant discount to asking rent.
The
following report was compiled using data from nearly 100
properties spanning multiple classes of office space and sub
markets. For any property specific information, please
contact Cory Petcoff at 863-607-4100.
South
Lakeland (Polk Parkway) Office Market
The South Lakeland market is relatively young with most
buildings constructed within the last 30 years. These
properties offer ample parking and attractive rental rates.
Because the South Lakeland market is surrounded by residential
uses, it is appealing to many users because of its proximity
to the homes of the owners and employees. The 4Q 2009 market
survey revealed more than 260,000 sf of vacant space within
the sub market at a weighted average asking rent of $17.67 per
square foot. The average rental rate was artificially
inflated by large vacancies at some of the most expensive
buildings in the market. Four properties contain
approximately half of the available space in this market. The
single largest available space at the time of this survey was
50,000 sf and the smallest available space was 600 sf.
East Lakeland Office Market
The buildings in the East Lakeland sub market are
primarily industrial and flex properties. The available
office space is made up of class B and C properties with the
most affordable rental rates in the city. In the fourth
quarter of 2009 the market survey revealed almost 40,000
square feet of vacant space at an average asking rental rate
of $12.19 psf.
Downtown
Downtown is the largest and most traditional office market in
Lakeland. Tenants in this submarket include Publix, FedEx,
Verizon, the City of Lakeland, and several financial
institutions. Downtown provides an excellent office
atmosphere with historic buildings, restaurants within walking
distance, and incredible views, however many properties
downtown offer challenging parking environments. Rents in
Downtown have traditionally been the highest of the four
submarkets, however increasing vacancy rates have put pressure
on asking rents and offered concessions. As of December 31,
2009, there were 191,545 square feet available (an increase of
65,391 from December 31, 2008) at an asking rent of $16.98 per
square foot down from $18.03 in December of 2008. Rents in
Downtown range from as little as $9 per square foot to as much
as $27 per square foot.
North
Lakeland
The North Lakeland Office market encompasses a large
geographical area that includes I-4, the medical office
buildings available on Lakeland Hills, and the city and county
government buildings around Memorial Boulevard. Burton
Katzman, a development company from Bingham Farms, Michigan,
has planned 75,000 square feet of class A office development
along I-4 on Mall Hill Drive (between Kathleen and Griffin
Roads). While this project has been delayed indefinitely, at
some point this will fill the void of trophy class A office
product along I-4 in Lakeland. The second quarter survey
showed 181,895 sf of vacant space; however 62,000 square feet
were available at one property (Lake Parker Plaza). Due to
the size and condition of the vacant space at Lake Parker
Plaza, asking rent is $6.91 per square foot. Excluding that
asset, the North Lakeland submarket has 119,895 sf available
at an average asking rent of $13.92 per square foot.
*All
rents were provided on a modified gross basis with Tenant
paying for utilities and interior janitorial expenses; while
the landlord pays the cost of property taxes, insurance, and
common area maintenance. Asking rents are not a direct
indication of the prices at which deals are getting
completed. Concessions are escalating in this all markets and
range from as little as one month free rent to as much as $30
per square foot in tenant improvement allowance.
For more
information about Lakeland Florida office space, call Cory
Petcoff at:
Baron Realty
863 607-4100
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