Supply & Demand
The Polk County overall vacancy rate for warehouse/distribution (W/D) product in Q3 rose 10 basis points (bps) year-over-year (YOY) to 7.4%. The market recorded net occupancy gains of nearly 477,000 square feet (sf) in Q3, led by Nearly Natural's occupation of 413,000 sf at Interstate 4 Logistics Hub in the Northeast Lakeland submarket. That one move-in made up roughly three-quarters of year-to-date net absorption over 529,000 sf. Additional move-ins included an undisclosed tenant's 65,000 sf at Region Center in Northwest Lakeland and 33,000 sf across three suites at The Ruthvens at Pace Innovation Center – Building 300 in East Polk County. Move-outs were limited, with no single W/D occupancy loss exceeding 17,500 sf. Northeast Lakeland's vacancy rate fell 340 bps YOY to 6.7%, while Southwest Lakeland remained the highest at 13.8%, as new deliveries with available space outpaced move-in activity.
Leasing activity totaled 828,000 sf in Q3, with the Lakeland submarket accounting for nearly 564,000 sf of new deals signed. YTD W/D leasing activity reached 2.2 million square feet (msf), a 22.9% decline YOY. The decrease reflects a tough comparison, as Q3 2025 alone recorded nearly 2.0 msf of activity. Large-format demand remained, led by World Electric Supply's 274,000-sf new lease at 5300 Allen K Breed Highway in Southwest Lakeland and HD Supply's 400,000-sf renewal at 6850 Firstpark Boulevard in Northeast Lakeland.
New development accelerated in Q3, with 556,000 sf of space delivered, led by Southwest Lakeland (354,000 sf) and Northeast Lakeland (172,000 sf). Projects underway increased to 2.7 msf, up from 2.0 msf last quarter, driven by Central Florida Integrated Logistics Park 4A, a 1.3-msf Amazon project in East Polk County. With roughly 91.0% of the pipeline still available, continued tenant demand will be critical to limiting vacancy pressure as new space delivers.
Market Pricing
The overall average asking rent for W/D space in Polk County climbed in Q3 to $9.14 per square foot (psf), reflecting a 13.4% YOY increase. The Southeast Lakeland submarket posted the most significant gain, with average W/D asking rents rising 18.5% YOY to $10.50 psf. Southwest Lakeland rose 13.8% to $9.82 psf, while Northeast Lakeland remained the lowest-priced at $7.04 psf. Rent growth may moderate as landlords work to lease the growing pipeline and elevated Southwest Lakeland vacancy, using pricing adjustments or concessions to backfill space.
