When it comes to Florida’s industrial real estate market, Orlando is often viewed as a single, high-growth distribution and operations hub. For those of us on the ground, however, the more important story is that the market is no longer moving uniformly.
According to Colliers’ market reports for the second quarter of 2026, the Central Florida market reached approximately 253.6 million square feet of industrial and flex inventory, while industrial vacancy improved to 7.4 percent from 7.5 percent in the first quarter. Those figures point to stable fundamentals overall; however, the reality is that demand is becoming more concentrated in well-connected submarkets with established infrastructure and modern industrial inventory.
This shift is most visible among owner-users and tenants seeking less than 100,000 square feet. For these companies, location affects labor access, delivery times and operating costs. Large regional distribution users still evaluate sites through a broader logistics lens, often considering service radiuses of 200 to 400 miles, while smaller and midsized occupiers place greater weight on immediate connectivity.
Southeast Orange County
Southeast Orange County remains Orlando’s strongest industrial submarket because of its transportation connectivity, established infrastructure and concentration of modern industrial space.
Southeast Orange County recorded 240,815 square feet of industrial net absorption during the second quarter, the highest total among Orlando’s submarkets. It also had approximately 1.4 million square feet of industrial space under construction.
Southwest Orange County also continues to attract significant tenant interest. The submarket recorded 113,032 square feet of industrial absorption during the quarter and maintained a 6.7 percent industrial vacancy rate.
Colliers’ first-quarter 2026 market report highlighted concentrated absorption in Southeast Orange, Northwest Orange and Osceola County. By the second quarter, Southeast remained strong while Southwest gained momentum and Northwest softened. This shift reinforces that demand is rotating among select submarkets rather than lifting the entire region evenly.
Northwest Orange ended the quarter with a 12.3 percent industrial and flex vacancy rate and slightly negative absorption. Some larger warehouse buildings face greater availability because the corridor remains less convenient for users that need direct access to I-4 and Orlando’s beltway system.
Osceola County maintained a lower 6.2 percent industrial vacancy rate, but it posted negative absorption after delivering 235,000 square feet of new space in the second quarter. The county historically attracted industrial development because of lower land costs, but rising impact fees are now affecting project feasibility.
Stabilizing, not weakening
On paper, the slower pace of transactions could give some observers pause. Orlando recorded 260,473 square feet of industrial and flex net absorption during the second quarter while 843,469 square feet of new supply entered the market. Meanwhile, approximately 2.4 million square feet remained under construction.
Even so, the broader numbers point to normalization rather than weakening. Industrial asking rents held relatively steady at $12.56 per square foot (triple net), compared with $12.63 in the previous quarter.
Companies are still evaluating space, but decisions are taking longer. Several large-block requirements remain active and could positively influence absorption and leasing activity during the second half of the year.
Activity along the I-95 corridor is gaining momentum as aerospace, defense and advanced manufacturing users support demand in Brevard and Volusia counties.
Disciplined development
Elevated land prices, construction costs, financing expenses and stricter underwriting standards are leading developers to pursue projects more selectively.
During the market’s rapid-growth phase from 2020 to 2023, speculative projects could move forward based on expectations that demand would quickly absorb new supply. Today, owners, lenders and developers are emphasizing long-term feasibility, project timing and demand within specific submarkets.
Financial leaders weigh in
Industrial users are applying the same discipline to their real estate decisions. CFOs and other financial leaders are asking whether a company truly needs more space, whether a relocation is necessary and how a facility will support the business over time.
Smaller third-party logistics companies are increasingly subleasing excess space after taking on larger footprints during the market’s rapid-growth period. Landlords are also showing more flexibility in lease negotiations. In one recent example, a new building marketed at $13 per square foot triple-net could be negotiated closer to $11.50 with a meaningful free-rent period.
The Central Florida industrial market is no longer the “wild west” of 2021 to 2023, when tenants accepted nearly any asking rental rate simply to secure space. Tenants are now more stringently questioning whether real estate opportunities make financial and operational sense.
Planning ahead
Rather than planning around the next two or three years, many companies are evaluating facilities through a five- to 15-year operational lens. That means considering labor availability, transportation access, automation, material-handling systems and the ability to expand. It also means beginning the search well before a lease expires.
Central Florida remains one of the state’s most important industrial and distribution regions, but the next phase of growth will be more selective. Companies that plan early, understand submarket differences and remain financially disciplined will be best positioned to secure the right space.
— Rafael Mendez, CCIM, is a senior associate with Colliers in Orlando, specializing in the acquisition, disposition and leasing of industrial properties across Central Florida. This article was originally published in the August 2028 issue of Southeast Real Estate Business.