Q2 2020 Market Reports – Palm Beach and Broward Counties
Commercial Realty has analyzed the office and industrial markets in both
Broward and Palm Beach Counties, to help you keep track of key data. This
information has proved valuable for our clients: tenants, investors, and
landlords can all follow their respective markets to understand the leverage
they have in negotiations, and whether their property is outperforming (or
under-performing) the rest of the market.
During the 2nd quarter all sectors other than the Palm Beach Industrial experienced negative absorption and increasing vacancy. Rental rates have continued to grow in all markets though, due mainly to the short term nature of leases, which normally command rent premiums.
Read on to see how the Broward and Palm Beach County markets performed during the 2nd quarter of 2020.
The Palm Beach County office market
Was less affected by COVID-19 than Broward. Rental rates increased by $0.72 per s.f. and vacancy increased only 10 basis points from the previous quarter, now at 9.3%. Net absorption was near zero despite the delivery of 100,000 s.f. of new space. Among the largest office lease signings in this quarter were 4Oceans’ 51,096 s.f. lease at Innovation Center, Boca Raton, and International Materials’ 19,529 s.f. at lease at 4th
Delray, Delray Beach. Among the largest sales in the Palm Beach office market this quarter were Alliance Partners HSP’s sale of the 243,000 s.f. Golden Bear office park in Palm Beach Gardens to a joint venture between Waterfall Asset Management and MH Commercial Real Estate Fund, for $49.75 million ($205 per s.f., which reflected the fact that the property was on a ground lease). Review the full Palm Beach Market Office Report by clicking here.
The Palm Beach County industrial market
Was the strongest performer in the region this quarter. Vacancy remained at 3.6%, rental rates increased by $0.20 per s.f., and absorption was positive at +36,460 s.f. Among the largest industrial lease signings this quarter were Cavastone’s 17,835 s.f. lease at 1377 Clint Moore Rd, Boca Raton. Among the largest sales this quarter were Stateside Capital Group’s sale of the 151,008 s.f. industrial building located at 1177 West Blue Heron Blvd in Riviera Beach to Dalfen Industrial for $18.35 million. Review the full Palm Beach Market Industrial Report by clicking here.
Net absorption improved slightly in the Broward County office market, ending the 2nd quarter at negative 247,146 s.f., while vacancy rates went up 30 basis points to 8.7%, yet rental rates rose by $0.83 per s.f.! Among the largest office lease signings in the second quarter were Northwest Medical Center’s 29.938 s.f. lease renewal at Northwest Family Health Center, Margate, and KCI Technologies 23,725 s.f. lease at Crown Center, in the Cypress Creek/Uptown Fort Lauderdale submarket. Among the largest sales in the Broward County office market this quarter were OKO Group’s assemblage and purchase of properties totaling +/- 6.7 acres, including 27 separate parcels east of Federal Highway and south of Las Olas Blvd, for $63,000,000 ($9.4 million per acre!), purchased in part by a loan from Michael Dell’s MSD Partners. Review the full Broward Market Office Report by clicking here.
The Broward County industrial market
Had a modest increase of $0.04 per s.f. to bring the average asking rental rate up to $9.27 per s.f., even with vacancy rates going up by 60 basis points to 6.3%, 500,000 s.f. of new space delivered, and negative absorption of 176,272 s.f.
Among the largest industrial lease signings in the second quarter were KeHE Distributors’ 201,849 SF lease renewal at Meridian Business Campus, Weston, and Brandy Melville’s 112,318 SF lease at the Miramar Park of Commerce. Among the largest sales this quarter were Cusano’s Bakery’s purchase of a 274,000 SF warehouse in Coral Springs for $13.6 million ($49.60 per s.f.). Review the full Broward Market Industrial Report by clicking here.