Piggybacking Off Miami-Dade, Palm Beach County Office Market Improving
Palm Beach's office market is slowly heating up, piggybacking on activity in Miami-Dade.
"It's a factor of the South Florida market. Miami tends to lead the way and then Broward follows," said Rick Miller, managing partner of Boca Raton-based Miller Partners. "Palm Beach, being the upper portion of the South Florida area, typically trails the progress of Broward and Miami, the 'capital' of Latin America."
Palm Beach has nearly 23.2 million square feet of office space. About 23 percent of that—or 5.4 million square feet—is vacant, according to CBRE Group Inc.
There's room for growth, analysts say, but the market's headed in the right direction, leasing an additional 300,000 square feet in the last year.
"We've seen positive trends in the last 12 months," said West Palm Beach broker Kevin McCarthy, vice president of Jones Lang LaSalle. "The consensus is that this will continue—not in a dramatic way but in a slow gradual way."
Multiple large deals toward the end of last year lowered vacancy rates and boosted absorption.
In the fourth quarter, for instance, law firm Cole, Scott & Kissane leased 50,000 square feet at the Esperante Corporate Center, which changed hands in a $71 million sale during that period. That deal was the first sale in the central business district since CityPlace Tower traded in 2011, according to Jones Lang LaSalle.
The last three months of 2103 saw other major leases, including Frisco, Texas-based Conifer Revenue Cycle Solutions LLC's contract for 97,762 square feet at Boca Corporate Center and Campus. That deal was the largest lease agreement in the county in 2013.
The corporate center secured another major tenant when Boca Raton-based Tyco Integrated Security, a provider of commercial security systems, leased 72,234 square feet for its 280 employees.
The transactions energized the office sector, pushing vacancy rates down to 20 percent at the start of the new year from 22 percent a year earlier.