Palm Beach Industrial Market Sees Strong Leasing, Sales in Q1

MIAMI-The Palm Beach County industrial market experienced strong leasing and sales activity in the first quarter, according to Cushman & Wakefield’s just-released industrial overview for the county for that period. The market showed “signs of resilience,” the report states.

Total industrial leasing activity there for the quarter was 451,000 sf, and sales activity totaled 577,000 sf. GE Medical Systems’ 188,000-sf sale/leaseback in Jupiter helped the leasing activity.

Deals that contributed to the hike in first-quarter sales from 225,000 sf at the end of last year included the sale of the above-mentioned GE/Marquette building to One Liberty Properties Inc., as well as the sale of the 161,000-sf Phillips Components building to Windsor Gardens Joint Venture. These two buildings were sold for $15.75 million and $7.1 million, respectively.

Even the negative 87,080-sf net absorption for the county in the first quarter is an improvement, compared with the negative 106,000 sf in the previous quarter and the negative 331,000 sf in the first quarter of 2002.

However, construction completions contributed in part to an increase in overall available space and the vacancy rate in the first quarter, compared with the fourth quarter of 2002. From the fourth quarter 2002 to the first quarter 2003, the available space grew from 2.6 million sf to 2.9 million sf, and the vacancy rate increased from 6.3% to 7.1%.

The highest vacancy rate in the county first quarter–18%–was seen in Boynton Beach. That figure is up from 16% the quarter before. Contributing to this vacancy rate are the 350,000-sf former Motorola manufacturing building and recently delivered space available.

Despite the overall vacancy rate increase, the leasing and sales activity led to stable average asking rental rates in the county. Boca Raton has maintained the highest rates in the county for warehouse/distribution space and each property type.

The report also states: - Construction deliveries for the county this year include two-office/service buildings completed at the High Ridge Commerce Center. Also, the 99,750-sf Premier Gateway Center Building Two and 181,000 sf of warehouse/distribution space at Premier Airport Center are set to be finished by the middle of the year. - The county is drawing more investor attention because of a lack of land in Miami-Dade and Broward counties. - More than 215,000 sf of speculative, warehouse/distribution space is proposed in the West Palm Beach submarket.