This year’s CBRE Real Estate Outlook report indicates that the office market in Palm Beach County still remains tight so far within the first three months of this year. Cushman & Wakefield’s first-quarter report had indicated Palm Beach County was in the top 10 rank among 87 metro areas in absorption of office space and office rent growth.
According to the CBRE report, office vacancies fell to 18.9 percent, while the rent prices have rose for 10 quarters in a row. “Traditional concessions, such as free rent, generous improvement allowances and free garage parking, are almost non-existent,” CBRE stated.
Palm Beach County officials are presently working on bringing hedge funds from the Northeast to the area, targeting West Palm Beach and Palm Beach. So far, the efforts have been positive for the Class A office market and the luxury home market.
The Real Deal noted in an article that hedge fund firms have established offices in these areas:
-Tudor Investment Corp., led by legendary hedge fund manager Paul Tudor Jones. The firm is leasing 10,800 square feet at 109 Royal Palm Way in Palm Beach, and he bought a home at 1300 South Ocean Boulevard in Palm Beach for $71 million last year.
-Affiliated Managers Group is now taking the entire top floor of the Phillips Point building at 777 South Flagler Drive, covering more than 20,000 square feet, after starting with about 7,000 square feet, Smallridge said.
-Wexford Capital and SandPointe, which also are in the Phillips Point building, and Skybridge Capital, led by Anthony Scaramucci, which is based at 3601 PGA Boulevard in Palm Beach Gardens.
In Florida’s central business districts (CBDs), the areas revealed substantial growth in average asking lease rates, increasing 5.9 percent year-over-year, according to the report. CBRE also highlighted that Florida’s office markets recorded over 1.5 million square feet of net absorption in the first quarter, setting a slower pace than the quarterly average of 1.7 million square feet in 2015. Four office occupier sectors – banking, insurance, legal services and technical consulting – led leasing activity was also noted.
CBRE also indicated that Q1 2016 closed with nearly $947 million in sales volume in 34 transactions. As of Q1 2016, more than 1.3 million square feet of office space was under construction statewide, primarily in Miami, which accounted for 67 percent. In the last 10 years, Florida’s population grew by an average of 680 people per day.