2024 Palm Beach County Industrial Market Report
Key Findings
- International and domestic migration boosted population growth, bringing in 36,000 residents to the metro since 2019.
- National Millwork, a manufacturing tenant, took on the largest lease of the year by leasing over 100,000 square feet in the West of Turnpike submarket.
- Businesses remain enticed by Palm Beach County for its proximity to the Port of Palm Beach.
Palm Beach County Industrial By the Numbers
- Sales Volume: $574M
- Average Sale Price per SF: $192
- Cap Rate: 6.7%
- Vacancy Rate: 6.0%
- Rent Growth: 4.6%
- Average Market Asking Rent per SF: $17.92
- SF Under Construction: 1.5M
- SF Delivered: 0
- SF Absorbed: 73.6K
Palm Beach County Demographics
- Unemployment Rate: 3.9%
- Current Population: 1,565,021
- Households: 626,797
- Median Household Income: $82,834
With a strong presence of professional and business services employers, Palm Beach ranks as one of the wealthiest counties in the nation. Residents can also eye new employment opportunities as Goldman Sachs recently leased an office in Downtown West Palm. Yet, forecasts for 2025 are predicting that most new job growth will come from the arts, entertainment, recreation, accommodation, food services, and construction segments.
Palm Beach County Industrial Market Performance
The slowdown in industrial absorption during 2024 caused lower absorption levels from previous years, with 460,000 square feet absorbed. However, leasing activity has been strongest for properties under 30,000 square feet. Smaller industrial facilities should still note increased leasing as forecasts for 2025 project lower leasing metrics for properties greater than 50,000 square feet.
Moving forward, vacancies are forecast to remain below 6.0% throughout 2025. With the current vacancy rate of 6.0%, rents have increased to $17.90 per square foot. Rents have grown the most for flex properties, along with facilities larger than 100,000 square feet. These larger properties have outperformed in Palm Beach for three consecutive years, and now record a rent level of $14 per square foot. As vacancy is expected to remain tight, rent gains are forecast to average around 5% from 2024 through 2027.
Palm Beach County Construction
Industrial developments have consistently risen since 2021, and are expected to continue growing. The Palm Beach City Outlying submarket has the highest level of developments, with 755,000 square feet on the way as of Q4 2024. Around 600,000 square feet are forecast to deliver in 2025, which could potentially cause supply pressure in Palm Beach County.
Sales Velocity
Sales decreased in 2024 and recorded a total sales volume of $564 million, which is below pre-pandemic levels. Activity for smaller deals has also increased as private players made up 70% of sales. Moving forward, forecasts for 2025 expect high cap rates to continue, unless inflation levels decrease.
