These factors caused businesses to spend less or, if they were not able to reduce their budgets, to downsize or close offices. This is shown in the overall county absorption; that figure was negative 60,188 sf at the end of the first quarter--almost 100,000 sf less than the positive 29,990 sf of absorption at the end of the first quarter last year.
However, according to the report, there were some signs that the county was attempting to stabilize. One is leasing transactions were steady in the Boca Raton submarket for the period. Among the deals signed: Sunbeam Products Inc. signed a deal for 15,000 sf at Peninusla Executive Center; Adams, Coopers, & Marks inked a 12,500-sf lease at the North 40 Building; and Southtrust Bank moved into 7,699 sf at Via Mizner Financial Building, formerly the Citibank Building.
The Palm Beach International Airport submarket experienced the "most impressive leasing," the report states. There, Progressive American Insurance Co. acquired 26,193 sf at One Lakeside at Centrepark; and Powers, McNalis & Moody leased 11,982 sf at 1601 Belvedere.
This helped this submarket's overall vacancy rate decline by a substantial 25%, from 18.1% at the end of the first quarter 2002 to 13.6% at the end of the first quarter 2003. This area also had 38,648 sf of absorption--the most positive absorption in the county.
On the other hand, the overall vacancy rates in the South Palm Beach submarkets almost doubled in the year. Delray Beach saw the biggest change, from 15.8% to 26.7%. In addition, the Boynton Beach rate rose from 7.9% to 14.6%, which can be attributed to more than 116,000 sf of available sublease space in the submarket.
An increase in sublease space was common in the county in the first quarter. In fact, Delray Beach saw a hike in its sublease vacancy rate from 3.1% at the end of the first quarter 2002 to 10% a year later. Along the Federal Highway Corridor of the Boca Raton submarket, the sublease vacancy rate rose from 4.8% to 7.6% in the same period. This contributed to an overall vacancy rate in Boca Raton of 18% at the end of this quarter, up from 17.1% a year earlier.
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