QUARTER LEE NOTE
Opening 2026, the market posted negative 49,274 SF of net absorption. This marks the second quarter in a row of negative net absorption. The headline, at first glance, appears concerning; however, a closer review shows it was largely driven by two significant give-backs, both of which were in South Orlando. Excluding these transactions, the market would have posted 270,000 SF of positive net absorption for Q1. Vacancy rates increased 87 basis points to 9.48%, largely driven by the delivery of nearly 1.4 million SF of new inventory.
Digging further into the data, we note that gross absorption was strong at 971,729 SF, reinforcing the fact that tenant demand is still strong. While leasing remained active, deals under 10,000 SF accounted for 60% of transactions, while the 10,000–50,000 SF range represented roughly one-third of leasing activity.