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 2Q 2010 market survey revealed 236,503 sf of vacant space within the sub market at a weighted average asking rent of $17.52 per square foot.  The average rental rate was artificially inflated by large vacancies at some of the most expensive buildings in the market.  Three properties contain approximately 40% of the available space in this market.  Excluding the three large vacancies, the South Lakeland market offers 133,567 square feet of available space at an average asking rent of $15.02 per square foot.  The single largest available space at the time of this survey was 50,000 sf and the smallest available space was 600 sf.

Dixieland Office Market
The Dixieland sub market is made up of the commercial properties along both the east and west sides of South Florida Avenue stretching from Ariana to Walnut Street.  A Community Redevelopment Area (CRA) was created in Dixieland to promote development activities that would invigorate the existing businesses, attract new businesses and investment, and provide a neighborhood commercial center for the surrounding residents.  The CRA is young but has already been instrumental in the renovation of several properties.  The second quarter market survey revealed 17,050 sf of vacant office space at an asking rent of $13.40 per square foot. 

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 June 30, 2010, there were 188,230 square feet available at an average asking rent of $15.34 per square foot down from $16.98 in December of 2009.  Rents in Downtown range from as little as $9.90 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 123,254 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 61,254 sf available at an average asking rent of $15.25 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