Delray Central OM
PALM BEACH OFFICE MARKET First Quarter 2017 SUBMARKETS Palm Beach County exhibited healthy economic activity as the market added 9,900 new jobs throughout the year, ending 2016 with an unemployment rate of only 4.7%, down 20 bps from the previous month. Job diversification continued to impact the county’s economy with significant improvement in IT and health- related industries. Development of public transit is paving the way for future growth in Palm Beach County. The anticipation of opening the 60,000 SF All Aboard Florida passenger rail station in West Palm Beach was a factor in the area’s office market improvement. DELRAY CENTRAL | PALM BEACH OFFICE MARKET OVERVIEW The Property is located within the Palm Beach County office market, which comprises approximately 24 million SF per Cushman & Wakefield research. The County, located at the northern end of the sprawling South Florida area, is the largest county in the state of Florida and has historically been at the forefront of Florida’s rising population and growing economy. ECONOMY
MARKET OVERVIEW Demand for office space remained positive as the market absorbed 575,276 SF of space in 2016. Quality Class A space continued to be desirable, marked by a decrease in overall vacancy of 190 bps in 12 months to 13%. However, the actual vacancy should be much lower, as most of the available space has already been leased with tenants not expected to move in until later in 2017. Developers had 88,069 SF of office under construction at year-end 2016. The imbalance between new supply and demand continue to drive rental rates higher in major submarkets. Overall suburban rents increased to $32.98 PSF, gross, while in Class “A” space the year ended with an average ask of $40.14 PSF, gross. Leasing activity was robust in 2016, with the most active submarket being Northwest Boca Raton.
PALM BEACH COUNTY OFF I CE STAT I ST I CS - F I RST QUARTER 20 1 7
Direct
Quarter
YTD
YTD
YTD
Direct
Overall
Wtd. Average Overall Net
Overall Net
Leasing Construction Activity Completions
No. Bldgs.
Inventory Vacancy Rate Vacancy Rate Rental Rates (psf)
Absorption Absorption
OVERALL
West Palm Beach CBD Palm Beach Non-CBD
27
3,128,022 19,907,002 3,897,874 3,372,293 3,665,078 3,082,681 582,397 1,978,881 525,581
13.4% 12.9% 17.2% 16.8% 19.5%
13.4% 13.3% 17.3% 16.9% 20.2%
$39.85 $33.55 $34.12 $28.33 $66.45 $34.82 $35.11 $33.94 $29.95 $27.93 $30.68 $30.38 $35.34 $36.90 $33.65 $31.80 $33.36 $37.24 $35.63
7,648 (3,388) 13,471 21,066 (7,595) 16,459 15,582
7,648 (3,388) 13,471 21,066 (7,595) 16,459 15,582
31,290 192,882 32,056 32,056 18,942 15,880 3,062 25,485 6,242 15,902 3,341 116,399 35,900 20,700 45,856 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
326
SUBURBAN WEST PALM BEACH
82 65 17 70 54 16 42 12 13 17 39 25 43 12 13
Suburban West Palm Beach
Palm Beach
NORTH PALM BEACH
8.5% 8.5% 8.4%
8.7% 8.6% 9.3%
Palm Beach Gardens/N. Palm Beach
Jupiter/Tequesta/Juno SOUTH PALM BEACH
877
877
11.2%
11.5%
9,345 4,770 7,150
9,345 4,770 7,150
Lake Worth
493,541 528,089 957,251
5.0%
5.0%
Boynton Beach Delray Beach BOCA RATON Glades Road
22.7%
23.2%
8.0%
8.5%
(2,575) (42,663) (34,866) 21,470 (9,531) (19,890) 154
(2,575) (42,663) (34,866) 21,470 (9,531) (19,890) 154
132
10,365,169 3,006,583 1,638,899 4,217,150
13.2% 15.3% 13.5% 11.4% 11.0% 15.9% 13.0%
13.7% 15.7% 14.2% 12.0% 11.0% 16.4% 13.3%
Federal Highway Corridor Northwest Boca Raton Southwest Boca Raton Downtown Boca Raton
657,631 844,906
8,280 5,663
PALM BEACH TOTAL MARKET
353
23,035,024
4,260
4,260
224,172
Delray Central // Page 54
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