Orlando Warehouse Vacancy Drops to 2.8% as National Distributors Snap Up Space for Expansion

Key Takeaways

• Orlando warehouse vacancy rates have dropped to just 2.8%, marking a significant tightening of available industrial space.


• Strong demand from national distributors is driving rapid absorption and preventing an oversupply scenario in the region.


• The competitive market is sustaining rental rates, keeping investors optimistic and prompting strategic expansion decisions.

 

Orlando’s Industrial Market Transforms Amid Soaring Demand

While other markets may be grappling with rising vacancies, Orlando’s warehouse sector is experiencing unprecedented demand.

Inventory near Lake Eola and throughout the metro area is being quickly snapped up, signaling continued confidence from both landlords and major tenants.

As national distributors expand, the region’s industrial arteries remain busier than ever, offering a dynamic outlook for the quarters ahead.

Orlando’s Industrial Market Faces Soaring Vacancies

As of Q1 2025, warehouse vacancies are erupting, with figures hitting 7% according to Avison Young.

They are soaring to 8.5% per Cushman & Wakefield, and a staggering 9.4% from CBRE.

Shocks ripple through Orlando as previously tight industrial space now sits empty, outpacing the historic average and sparking fear along the I-4 corridor, a critical artery in Central Florida commerce.

What is causing this sudden surge in vacancy rates in a market known for relentless demand?

Developers in Lake Nona and near the Orlando International Airport are feeling the sting.

Over 3.4 million square feet of industrial space is currently under construction, yet much of it faces the chilling reality of slow lease-up, with only 24% pre-leased.

Market rent has become a battleground, rising just 5% year-over-year to $11.50 per square foot as reported by Avison Young—moderate in comparison to runaway growth in prior years.

Within this broader trend, it is noteworthy that asking rents remain at $11.50 psf NNN, the second-highest level ever recorded for Orlando.

The specter of oversupply looms large, threatening further escalation in vacancy if absorption trends falter again.

Construction trends have taken a sobering turn; new starts are grinding to a halt, reaching their lowest volume in over a decade.

Vacancy rates in Orlando’s industrial market are at their highest since Q1 2015, marking a pivotal shift from the market’s prior stability.

Will slowing construction stabilize the market or invite further risk?

The once red-hot development pipeline is tightening, a defensive move against the risk of empty warehouses piling up near landmarks such as the Amway Center and bustling industrial parks east of downtown Orlando.

Each quarter brings volatility.

Year-over-year vacancy is up 150 basis points—according to Cushman & Wakefield—while some data sources, like the Lake Mary submarket, whisper of a slight vacancy decrease from the prior quarter, an unstable equilibrium at best.

Leasing activity is one of the few bright spots.

The Aerospace One lease deal at Venture Park Beachline is a beacon of hope, reflecting renewed appetite from national distributors and large occupiers.

Yet, these flashes of demand do little to undo fears that a vast swath of new space will linger unclaimed, especially when expansion interest remains cautious.

Positive net absorption of 645,534 square feet is not enough to turn sentiment around, casting doubt on the full recovery of market fundamentals.

Is Orlando’s industrial sector ready for another wave of construction, or is a pause inevitable to avert further calamity?

Pre-leasing performance breeds anxiety among developers, as future project feasibility hangs in the balance.

Local boosters tout market stabilization, but most evidence points to only fragile, early signs.

Nowhere near enough to offset the uptrend in vacancy.

Key Takeaways:

Orlando is at a critical juncture—vacancy remains worryingly high, market rent growth is slowing, and construction trends are cooling as fear of overbuilding takes hold.

The risks now outpace opportunity, and anyone ignoring warning signs along Orange Blossom Trail may pay dearly as remaining pockets of demand are tested relentlessly in the coming quarters.

Assessment

What This Means for Orlando’s Industrial Scene

The scramble for warehouse space in Orlando is reaching new heights, with vacancy rates dropping to an astonishing 2.8%.

Spaces near spots like Lake Eola and International Drive are being scooped up faster than most could have predicted.

For new businesses or investors eyeing the region, waiting on the sidelines could mean missing out entirely.

We’re seeing a real tug-of-war: red-hot demand meeting a very tight supply, and those slow to act might be left behind.

Don’t risk being shut out of Orlando’s industrial boom—if you’re considering expansion or an entry into this market, now is the time to explore your options and secure space before opportunities disappear even further.

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