Real Estate

The Business Development Board is the official public/private economic development organization of Palm Beach County, and Palm Beach County partner of Enterprise Florida.

2024

Q2 - Palm Beach County Office MarketView

  • High quality Class A space in West Palm CBD demands a significant premium with average rents reaching a historic $67.70 PSF, a 7.7% increase over same time last year.
  • Vacancy of several large blocks in North & West Boca has led to negative absorption of 119K SF in South County, while North County had 38K SF positive absorption.
  • Construction pipeline in Palm Beach County remains strong with over 1.1M SF of office space under development

Q1 - Palm Beach County Industrial MarketView

  • As 2024 gets underway, key performance indicators of Palm Beach’s industrial market have been softening over the past four quarters. However, the vacancy rate dropped by 30 basis points quarter-over-quarter. As a result, the market for both large and small bay spaces remains very tight in most submarkets, even as supply additions have risen over the past few quarters.
  • Markets shifts have been visible in rent movement, too. Asking rents have grown by about 6% year-over-year, which exceeds the region’s long-term annual growth rate of about 4%.
  • A positive for landlords in Palm Beach is that supply-side pressures have been moderating as well. With about 1.5 million square feet underway metro-wide, the pipeline remains above historical norms.
  • Net absorption was positive for the 16thstraight quarter in Q1 2024, though the pace slowed considerably.

2023

Q4 - Palm Beach County Office MarketView

  • The construction pipeline in the CBD and Delray/Boynton Beach will provide fresh options as the combined Class A direct vacancy sits at a record low 8.8%.
  • Sublease availability stabilized in 2023 despite meaningful sums of new spaces added following numerous spaces being reoccupied and subleased.
  • In 2023, Class B rents experienced significant growth, rising by 10.6% to reach $27.43 per sq. ft., deviating from the usual trends observed in Class B buildings, which show a 10-year historical average rent growth of 4.5%. Conversely, despite previous years of record growth, Class A rents remained unchanged.

Q4 - Palm Beach County Industrial MarketView

  • Palm Beach's trailing 12-month industrial net absorption has slowed to 340,000 sq. ft., down from elevated levels of 1.4 million sq. ft. reached during early 2022.
  • Concurrently, a substantial influx of new completions introduced an additional 1.5 million sq. ft. of new supply to the market, propelling the direct vacancy rate to 4.2% from 2.3% during the past 12-months.
  • The average asking rent remained steady throughout Palm Beach this quarter, reaching $15.75 per sq. ft. This historic high figure showcases the market’s resilience despite minimal quarterly fluctuations.

2022

Q4 – Palm Beach County Office MarketView

  • Leasing activity slowed in the fourth quarter; however, this follows a strong first three quarters and 2022 is still fairly in line with 2021 levels.
  • Sublease availability reached 3.5% this quarter; a record high in the county.
  • Rent growth appears more muted than reality as quality spaces continue to lease up and make up a smaller share of the market's availability

Q4 – Palm Beach County Industrial MarketView

  • Dwindling availability and persistent demand continue to push asking rents higher, materializing in a 13% year-over-year average asking growth rate to $14.15 per sq. ft.
  • Construction activity increased across many submarkets as more than 1.9 million sq. ft broke ground this quarter. Currently, there is 2.4 million sq. ft. under construction –a record construction number for the market.
  • Levels of vacant space remain very low, compressing by 180 basis points since the height of the pandemic. Consistency in vacancy numbers can be attributed to the continued shortage of general industrial and warehouse space market-wide

Q3 2022 Palm Beach County Office MarketView

  • Recent rent growth has been led by South County which has seen rents jump 15.6% year-over-year to $29.26 per square foot.
  • Vacancy dropped below the 14.0% threshold to 13.8% for the first time since 2019.
  • Post-pandemic absorption is being compressed by sublease space which continues to come on-line as tenants evaluate future needs for office space.
  • The development pipeline remains robust. While under-construction has been focused inthe CBD, several proposed buildings in South County are set to break ground in the near term.

Q3 2022 Palm Beach County Industrial MarketView

  • Dwindling availabilities and persistent demand continue to push asking rents higher, materializing in a 15% year-over-year average asking growth rate.
  • Construction activity increased by 430,000 sq. ft this quarter, as Southern Way Business Center broke ground in the West Palm Beach submarket.
  • WatertowerLogistics Center and Palm Beach Logistics Center, are expected to break ground next quarter. These projects are 185,000 sq. ft. and 305,000 sq. ft., respectively.
  • Levels of vacant space remain very low, compressing by 210 basis points since the height of the pandemic. Consistency in vacancy numbers can be attributed to the continued shortage of general industrial and warehouse space market-wide.

Q2 2022 Palm Beach County Office MarketView

  • Rental rates broke the $30.00 threshold for the first time after increasing of $2.18 per square foot (7.5%) compared with the previous quarter. Growth is strong countywide with meaningful increases in both North County and South County.
  • Direct vacancy dropped to 12.9%; it has only fallen below this number once before in the past 10-years.
  • Development in the West Palm Beach CBD continues to grow as 300 Banyan broke ground this quarter bringing the total square footage under-construction in the CBD up to 587,000 square feet.

Q2 2022 Palm Beach County Industrial MarketView

  • The fundamentals of Palm Beach’s industrial market are strong, positioning it well to weather any potential upcoming economic headwinds.
  • Market activity continues to be limited in geography to the West Palm Beach submarket. With 90% of the market’s development pipeline in this area, future leasing activity will be driven by new deliveries as it has in previous quarters.
  • Speculative development continues to push ahead, and nearly 500,000 sq. ft. of groundbreakings occurred in 2022. Nearly 1.0 million sq. ft. of deliveries are anticipated in the second half of this year with spaces ranging from 5,000 to 150,000 sq. ft. These developments will provide users with high quality-large scale options in a supply constrained environment.
  • The vacancy rate continued to compress in Q2 2022 as no major-move-outs were recorded and no new inventory was added. The overall vacancy now nears an all time-low; 2.7%.
  • For companies looking to lease industrial spaces, rents are expected to continue to rise. Currently, asking rents are up 13% year-over-year.

Q1 2022 Palm Beach County Office MarketView

  • The CBD development pipeline continues to grow with nearly 500,000 sq. ft. of projects under-construction and an additional 550,000 sq. ft. proposed.
  • Asking rents continue to break record highs and are up 9.9% year-over-year to $29.11 per sq. ft.
  • Vacancy dropped to pre-covid levels and is expected to continue to fall as new-to-market companies occupy space in recently delivered buildings.

Q1 2022 Palm Beach County Industrial MarketView

  • The market tallied 240,000 sq. ft. of positive net absorption, the result of many factors, including lease occupations from previous quarter signings, as well as some owner/user sales that prompted occupation.
  • Vacant inventory levels fell 60 basis points from the previous year to 3.4%. The market's vacancy rate has stayed under 5.0% for nine consecutive years.
  • The first quarter of 2022, saw asking rents increase by almost 10% year-over-year, the highest the market has seen in a decade.

2021

Q4 2021 Palm Beach County Office MarketView

  • Absorption broke the 500,000 sq. ft. threshold in 2021 for the first time since 2014.
  • Investor confidence remains strong in the fourth quarter as Boca Raton Innovation Campus traded and One Flagler broke ground.
  • West Palm Beach CBD saw record breaking rent growth as asking rents increased 33.9% year-over-year, or $11.68 psf,to $46.14 psf(NNN).

Q4 2021 Palm Beach County Industrial MarketView

  • Driven by a large built-to-suit from an E-commerce tenant, the Palm Beach market recorded a total 1.4 million sq. ft. of positive net absorption for 2021. This is the largest annual total since 2015.
  • Vacant inventory levels fell 30 basis points from the previous year to finish 2021 at 3.5%.
  • Strong growth of rental rates continued due to the reduced levels of available space. Average asking rents were up 5.4% annually, finishing at $11.11 per sq. ft.

Q3 2021 Palm Beach County Office MarketView

  • New-to-market activity continued this quarter as Millennium Partners leased 38,000 sq. ft. at CityPlaceTower, and Elliott Management leased 26,000 sq. ft. at 360 Rosemary.
  • Direct Vacancy currently sits at 14.5%, however, when 360 Rosemary is removed from the statistical set, direct vacancy in the county falls to below pre-pandemic vacancy levels of 13.6% to 13.4%.
  • Investment in office remains strong. Numerous properties traded this quarter and several proposed projects continue progress towards breaking ground.

Q3 2021 Palm Beach County Industrial MarketView

  • Supported by the phenomenal growth of e-commerce, the Palm Beach market continued its growth in the third quarter after a steep decline in 2019. And although this quarter produced over 1.0 million s.f of positive absorption, it was almost exclusively due to Amazon’s built-to-suit facility located in Jupiter.
  • Most of the leasing activity remained concentrated in the West Palm Beach submarket, this comes as no surprise considering the glaring shortage in modern bulk product throughout the market.
  • Total vacancy for Class A product sits at 10.3% and is expected to drop to 6.2% by year-end as almost all Class A product in the market has been spoken for. Turnpike Logistics Center, which recently traded for $190 p.s.f, is currently the only Class A product in the market with space available.
  • The tenant mix engaging the market this quarter was more diverse, as the previous darling e-commerce, took a temporary back seat. Last mile-delivery, Wholesale Retail, Transportation, and Home Goods were some of the most active industries this quarter.

Q2 2021 Palm Beach County Office MarketView

  • 360 Rosemary delivered late in the second quarter nearly fully pre-leased. New-to-market tenants accounted most of the pre-leasing as they remain a driving factor in the market.
  • Sublease space is not impacting Palm Beach County like most markets in the state with limited spaces coming on-line.
  • Asking rents in the county continue to rise, predominantly driven by landlords in the West Palm Beach CBD. Class A rents in the CBD are up 14.2% year-over-year to $45.93/sq. ft.

Q2 2021 Palm Beach County Industrial MarketView

  • Palm Beach County has a robust construction pipeline, with 1.1 million sq. ft. of speculative development slated to begin construction over the next 12-months.
  • The average new transaction in Q2 2021 was 8,600 sq. ft.; that is an increase of 62% compared with the average new transaction in Q2 2020 (5,300 sq. ft.).
  • In Palm Beach, the average price paid for industrial land in Q2 2021 was $975,000 per acre. However, with the rapidly evolving market for industrial land, this asset is quickly approaching prices of $1.0 million per acre or more.

Q1 2021 Palm Beach County Office MarketView

  • New-to-market tenants remain top of mind in West Palm Beach as there are 125,000 sq. ft. of active office requirements. The largest new-tomarket deal signed was by NewDay USA which leased 52,300 sq. ft. at 360 Rosemary which is set to deliver in the second half of 2021.
  • Investment in the market continues to peak as Phillips Point traded in the first quarter and development pipeline in the downtown continues to grow with new proposed office projects.
  • While the northern half of the county has seen activity increase compared with pre-pandemic levels, the southern half of the county has been slower to recover.

Q1 2021 Palm Beach County Industrial MarketView

  • During Q1 2021, the average transaction size was roughly 5,700 sq. ft., where asking rents are being recorded at roughly $13.10 (NNN) per sq. ft.
  • North of Palm Beach County, Legacy at Traditions is a Class A speculative development which can accommodate users between 100,000 and 2,000,000 sq. ft.; build-to-suit opportunities are also possible here.
  • The 2ndlargest occupancy for the quarter was TireHub, occupying 40,500 sq. ft. at Airport Logistics Park –Building 200. PODS was the largest (120,000 sq. ft.).

Real Estate Reports provided courtesy of CBRE.

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QUARTERLY PALM BEACH COUNTY BUSINESS MAGAZINE

Palm Beach County Business magazine is recognized as the quarterly business portrait showcasing local influencers and news in the County.

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QUARTERLY PALM BEACH COUNTY BUSINESS MAGAZINE

Palm Beach County Business magazine is recognized as the quarterly business portrait showcasing local influencers and news in the County.

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