Palm Beach

MARKETVIEW
Palm Beach County Industrial, Q2 2016
Warehouse construction growing to

meet demand
Total Vacancy
Lease Rate
3.5%
Net Absorption
$9.06 PSF
Completions
116,000 SF
229,000 SF
*Arrows indicate change from previous year.

Figure 1: Under Construction and Completions
(000s of SF)
Under Construction
Completed
1,200
1,000
800
600
400
200
0
2011
2012
2013
2014
2015
2016 YTD
Source: CBRE Research, Q2 2016.

D E V E L OPMENT
The Panama Canal Authority (ACP) officially opened

its new gates to toll-paying container, tanker and
cargo ships in Q2 2016.
Call 4 Health, a local call center expanded and

relocated from 8,000 sq. ft. in the Boca Raton
submarket to 17,800 sq. ft. in the Delray Beach
submarket. The company plans to hire an
additional 200 employees over the next year.
New to market, Ramatex International which

manufactures and distributes textile products,
moved their business from New Jersey to 1310 53rd
Street in Mangonia Park, and now occupies 24,500
sq. ft. The company plans to hire 20 employees.
Q2 2016 CBRE Research
There were two buildings completed in the second

quarter and three projects are under construction.
Duke Realtys Turnpike Crossings project located
in West Palm Beach delivered Buildings 1 and 2 in
Q2 2016, totaling 229,074 sq. ft. The property was
34% leased upon delivery and features 32 ft. clear
height with immediate access and visibility from
Floridas Turnpike.
There are three projects under construction
totaling 700,041 sq. ft., the majority of which is in
the West Palm Beach submarket. Development
began on McCraney Property Companys
2016 CBRE, Inc. |
M A R K E T V I E W PALM BEACH COUNTY INDUSTRIAL
Figure 2: Market Statistics
Submarket
Total
Inventory
(SF)
Boca Raton
7,271,628
3.8
8.3
76,693
105,343
10.67
Boynton Beach
4,177,475
2.4
4.5
(18,840)
45,980
8.91
Delray Beach
2,768,888
3.2
4.8
18,478
155,539
10.07
Jupiter
4,184,895
2.2
4.9
1,444
41,403
9.01
Lake Worth
3,057,107
1.2
7.7
(10,603)
76,825
252,000
8.11
Riviera Beach
9,339,588
3.6
6.9
31,663
39,901
8.18
West Palm Beach
14,799,160
4.6
7.3
16,972
12,903
316,345
8.82
Total
45,598,741
3.5
6.8
115,807
477,894
568,345
9.06
Manufacturing
4,956,545
1.5
3.2
(28,000)
9.51
R&D/Flex
9,742,344
4.0
9.4
47,307
140,226
10.94
30,899,852
3.7
6.5
68,500
365,668
568,345
8.01
Whse/Distribution
Total
Vacancy
(%)
Total
Availability
(%)
Q2 2016 Net
Absorption
(SF)
YTD Net
Absorption
(SF)
Under
Construction
(SF)
Avg. Asking
Lease Rate
($/SF/NNN)
Figure 3: Significant Q2 2016 Lease Transactions

Submarket
Address
Tenant
Transaction SF
West Palm Beach
1315 Jog Road
RMB USA
53,250
Boynton Beach
1938 High Ridge Road
United Materials
32,523
West Palm Beach
2211 Vista Parkway
Pilot Air Freight
32,124
West Palm Beach
1315 Jog Road
Straight Line Millwork
23,066

Figure 4: Significant Q2 2016 Sale Transactions
Submarket
Address
Buyer
Seller
Building SF
Sale Price $
Boca Raton
990 Rogers Circle
David Kahn
Milhous Group
125,000
12,400,000
Boca Raton
6100 Broken Sound Parkway
Liberty Equities
Milhous Group
62,661
8,600,000
Riviera Beach
3999 RCA Boulevard
Ana Caballero
John C. Bills Properties
30,000
8,500,000
West Palm Beach
5840 Corporate Way
Hook R Groves
V&K Investments
32,500
2,900,000
2016 CBRE, Inc. |

Turnpike Business Center located in West Palm
Beach, which will add 388,000 sq. ft. to the
inventory. Adrenalin Rush and Southern Wine &
Spirits pre-leased space at Turnpike Business
Center, totaling 98,183 sq. ft. Liberty Airport
Center, Buildings 1 and 2 are under construction
and will add over 218,000 sq. ft. to the
warehouse/distribution inventory in Q3 2016. The
project is located in West Palm Beach and will
total 640,000 sq. ft. once completed. Panattonis
Boutwell Business Center in Lake Worth will total
252,000 sq. ft. of warehouse/distribution space.
Construction is scheduled for delivery in Q3 2016.
L E A S I NG A C T I V I TY
Industrial demand resulted in over 115,000 sq. ft.

of net absorption in Q2 2016. Leases that
contributed to the positive absorption included
Distinctive Kitchen & Bath taking 22,644 sq. ft. at
6400 Park of Commerce Boulevard, located in the
Boca Raton submarket and SK Stones leased
21,798 sq. ft. at Duke Gateway Center in the
Boynton Beach submarket. The largest lease of the
second quarter was signed by RMB USA Inc., an
asset lifecycle management company with global
maintenance consulting and implementation
services, who took 53,250 sq. ft. at Duke Turnpike
Crossing, located in the West Palm Beach
submarket.
The total vacancy rate for industrial space
remained steady quarter-over-quarter, but declined
140 basis points (bps) year-over-year to the Q2
2016 rate of 3.5%. The submarkets that recorded
the lowest vacancy at the close of Q2 2016 were
Lake Worth (1.2%) and Jupiter (2.2%). In terms of
vacancy by development type, flex space saw the
largest decrease, dropping 230 bps to 4.0% yearover-year. Warehouse/distribution space declined
130 bps and the already tight manufacturing
sector stood at 1.5% vacancy at the close of the
second quarter, a 20 bps increase year-over-year.
High occupancy levels continue to push lease rates
higher for all property types in many submarkets.
The average asking rate for Q2 2016 was $9.06 per
Figure 5: Total Vacancy vs Average Direct Asking Lease Rate (NNN)

Vacancy (%)
Asking Rate ($/SF)
12
12
10
10
2
Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q2 2016
Vacancy Rate
Average Asking Lease Rate
Figure 6: Average Direct Asking Lease Rate (NNN)

Asking Lease
Rate ($)
Overall
Whs/Dist
R&D / Flex
12
10
8
6
4
2
Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q2 2016
Figure 7: Net Absorption

(000s of SF)
1,600
1,200
800
400
0
2011
2012
2013
2014
2015 2016 YTD

2016 CBRE, Inc. |

sq. ft. This rate represents a 2.3% increase quarterover-quarter and an 8.0% increase year-over-year.
In Q2 2016, the Boca Raton submarket had the
highest average asking lease rate for overall
industrial space at $10.67 per sq. ft., while the
Lake Worth submarket posted the lowest at $8.11
per sq. ft. Broken down by product type, the
average asking lease rate for manufacturing
properties experienced the largest increase at
13.5% year-over-year to $9.51 per sq. ft. Warehouse
space increased 9.4% from Q2 2015 to a current
rate of $10.49 per sq. ft. Flex properties increased
4.9% from the $10.00 per sq. ft. rate quoted during
Q2 2015 to the current rate of $10.49 per sq. ft.
S A L E S A C T I V I TY
User demand remained strong in Q2 2016, with

buyers seeking buildings below 20,000 sq. ft.
Fifteen sales closed during Q2 2016, totaling
415,128 sq. ft. with a dollar volume of $44 million.
The average price per sq. ft. for buildings sold
during the quarter was $105.
One of the largest transactions in Q2 2016 was the
sale of Boca Commercial Industrial Center in Boca
Raton. An individual investor, David Kahn
acquired the building totaling 125,000 sq. ft. for
$12.4 million, or $99.20 per sq. ft. from seller,
Milhous Group. The property was 84% occupied at
the time of sale and sold at a cap rate of
approximately 8%.
from May 2015. Job growth for the market showed

a 2.4% increase year-over-year, representing 13,800
jobs with sizable improvement in the specialty
trade contractors industry, increasing 5% yearover-year as of May 2016.
O U T L OOK
The Palm Beach County industrial market

continued to exhibit stable growth, as vacancy
reaches a nine-year low. Service driven small
business owners are thriving in the Palm Beach
County market as the population continues to
increase through in-migration. Demand for small
bay industrial space continues to grow as small
business owners look to take more permanent
space or expand their businesses. The volume of
sales activity is expected to remain active in 2016
as interest rates remain at favorable levels.
Figure 8: Unemployment
Unemployment
(%)
10
Palm Beach
Florida
United States
8
6
4
2
0
E C O N OMI C I N F L U E N C E
According to the Bureau of Economic Analysis,

Floridas GDP growth was 3.1% at the close of
2015, outpacing the nation. Floridas real GDP was
$789.8 billion, which ranked the fourth-largest in
the nation. Floridas strong economy was
highlighted by a low unemployment rate of 4.7%
in May 2016, a 70 bps improvement year-over-year.
The state gained 253,900 jobs year-over-year,
representing an employment increase of 3.2%.
2011
2012
2013
2014
2015
2016 YTD
Source: U.S. Department of Labor, Bureau of Labor Statistics, June 2016.
Palm Beach Countys unemployment rate was

4.2% in May 2016, reflecting a 90 bps decrease
2016 CBRE, Inc. |
CONTACTS
Endria Maiorano
Team Lead
+1 561 393 1642
endria.maiorano@cbre.com
Mary Jo Eaton
Global President
+1 305 428 6329
maryjo.eaton@cbre.com
Quinn Eddins
Director, Research and Analysis
+1 305 428 6325
quinn.eddins@cbre.com
CBRE Boca Raton
5100 Town Center Circle
Tower II, Suite 600
Boca Raton, FL 33486
Market Coverage: Includes all competitive industrial

buildings 10,000 sq. ft. and greater in size in Palm Beach
County.
To learn more about CBRE Research,

or to access additional research reports,
please visit the Global Research Gateway at
www.cbre.com/research-and-reports.
Disclaimer: Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy,
we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness.
This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior
written permission of CBRE.

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MARKETVIEW

Palm Beach County Industrial, Q2 2016

Warehouse construction growing to

*Arrows indicate change from previous year.

Source: CBRE Research, Q2 2016.

The Panama Canal Authority (ACP) officially opened

Call 4 Health, a local call center expanded and

New to market, Ramatex International which

Q2 2016 CBRE Research

There were two buildings completed in the second

M A R K E T V I E W PALM BEACH COUNTY INDUSTRIAL

Figure 2: Market Statistics

West Palm Beach

Source: CBRE Research, Q2 2016.

Figure 3: Significant Q2 2016 Lease Transactions

West Palm Beach

1315 Jog Road

1938 High Ridge Road

West Palm Beach

2211 Vista Parkway

Pilot Air Freight

West Palm Beach

1315 Jog Road

Straight Line Millwork

Source: CBRE Research, Q2 2016.

990 Rogers Circle

6100 Broken Sound Parkway

3999 RCA Boulevard

John C. Bills Properties

West Palm Beach

5840 Corporate Way

Source: CBRE Research, Q2 2016.

Q2 2016 CBRE Research

2016 CBRE, Inc. |

M A R K E T V I E W PALM BEACH COUNTY INDUSTRIAL

Industrial demand resulted in over 115,000 sq. ft.

Figure 5: Total Vacancy vs Average Direct Asking Lease Rate (NNN)

Asking Rate ($/SF)

Average Asking Lease Rate

Source: CBRE Research, Q2 2016.

Figure 6: Average Direct Asking Lease Rate (NNN)

Figure 7: Net Absorption

2015 2016 YTD

Source: CBRE Research, Q2 2016.

M A R K E T V I E W PALM BEACH COUNTY INDUSTRIAL

User demand remained strong in Q2 2016, with

from May 2015. Job growth for the market showed

The Palm Beach County industrial market

According to the Bureau of Economic Analysis,

Source: U.S. Department of Labor, Bureau of Labor Statistics, June 2016.

Palm Beach Countys unemployment rate was

2016 CBRE, Inc. |

M A R K E T V I E W PALM BEACH COUNTY INDUSTRIAL

Market Coverage: Includes all competitive industrial

To learn more about CBRE Research,

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