Palm Beach Office Market Showing Positive Signs

PALM BEACH COUNTY, FL-Office market conditions are improving in the Boca Raton submarket, as it is “ideally positioned for positive growth” the rest of the year, says a September CB Richard Ellis report. In the second quarter, about 42% of the leasing activity in the county was in this submarket, as the report notes tenants should act soon to obtain space here.Positive conditions also characterize the West Palm submarket, where class A and overall average asking rental rates rose in the first half of the year–from $17.09 to $18.55 NNN per sf for class A space, and from $16.61 to $17.23 NNN per sf overall. Here, 88% of the positive net absorption year to date has been in class A space.Nearby in North Palm Beach, increased vacancy rates have meant more tenant incentives, while institutional property owners are keeping steady rents. A large office space demand is still expected as a biotech cluster is developed related to the Scripps project.Meanwhile, demand is outpacing supply in the Palm Beach submarket. This has meant limited vacancies as well as the county’s highest average asking rates.