Palm Beach County Office Market Report
Palm Beach County Office Market Overview
The Palm Beach County Office market is in a strong position as it is one of the wealthiest counties in Florida. The county has the fourth-highest personal income in the state, largely due to its high concentration of employees in the financial and business services industries. Also, Palm Beach noted an increase of 36,000 new residents since 2019. This increase to the population is expected to aid employment growth in sectors like accommodation, food services, and construction.
Palm Beach By The Numbers
- Vacancy Rate: 8.4%
- Rent Growth: 2.4%
- Deliveries in SF: 53.8K
- Absorption in SF: 285K
- Sales Volume: $458M
Last 12 Months | Source: CoStar Group
Palm Beach Office Market Performance
Although the current vacancy rate of 8.4% is 0.4% higher than where it stood last year, Palm Beach County’s vacancy is lower than the national average vacancy of 13.8%. The strong demand for Class A office space has contributed to positive leasing metrics, aiding absorption. Class A spaces notched 25% of leasing activity throughout the past year. So far this year, the largest Class A lease occurred in the Banyan & Olive office building, located in the West Palm Beach CBD. Dycom Industries leased 43,673 square feet here, and will move into the space this November for a five-year lease.
Construction activity has been high in recent years, but has gone down to around 65,000 square feet so far in 2024. The majority of construction activity has been focused in the North Palm Beach, West Palm Beach, Delray Beach, and Boca Raton submarkets—with most of the offices here being Class A properties.
While transactions have slowed down in the market, the majority of sales have been from private buyers. They account for 74% of trades during the last year, while owner-users made up 16% of buying activity during this timeframe. The largest sale so far in 2024 occurred in July. The Class A One Town Center sold for $82 million, or $428.66 per square foot. It traded for a cap rate of 8%, and it is home to eight different tenants.
Market Average Rents
- Class A: $65.73
- Class B: $32.16
- Class C: $31.61
Average Sale Price Per Square Foot
- Class A: $336
- Class B: $298
- Class C: $294
Last 12 Months | Source: CoStar Group
