COMMERCIAL REAL ESTATE

Commercial Market Insights – May 2021 

Commercial Market Insights is provided by the National Association of REALTORS Research Group.  

The commercial real estate market is recovering, although commercial real estate transactions and the underlying market fundamentals are still weak compared to pre-pandemic condition.

Year-to-date through April 2021, commercial transactions were 10% below the level one year ago.  Commercial real estate prices continue to firm up, but valuations were still broadly down by 5% in April compared to January 2020.

Cap rates, adjusted for the risk-free 10-year T-bond yield (1.6% in April 2021), continued to trend downwards, which means commercial prices are firming up and that investors are more confident of the cash flow outlook of the acquired properties.”

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Commercial Real Estate Trends & Outlook – April 2021

Commercial Real Estate Trends & Outlook is provided by the National Association of REALTORS Research Group.  

The commercial real estate market is recovering but remains weak compared to conditions before the COVID-19 pandemic…..

Acquisitions for large commercial real estate―properties or portfolios of at least $2.5 million ― fell 28% year-over-year in the first quarter of 2021, with transactions declining across all property types, except for hotel acquisitions. Investors could be acquiring hotels to convert into other uses such as multifamily housing.

However, commercial real estate transactions should experience a stronger recovery across all sectors in 2022 as more businesses operate at normal capacity, a larger fraction of the workforce returns to the office, and as business and leisure travel picks up strongly in 2022 with the broad swath of the population fully vaccinated, and assuming there is no resurgence of deadlier COVID-19 variants.”

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Commercial Market Insights – March 2021

Commercial Market Insights is provided by the National Association of REALTORS Research Group.  

Despite the continued economic recovery and the accelerated vaccine distribution, commercial real estate acquisitions fell 59% in February as the lingering impact of the pandemic kept investors at the sidelines.

The dollar volume of acquisitions fell across all property classes: office (-71%), retail (-66%), industrial (-69%), hotel (-49%), and multifamily (-33%). On a year-to-date basis, acquisitions volume declined 53%.”

 

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Commercial Market Insights – February 2021

Commercial Market Insights is provided by the National Association of REALTORS Research Group.  

After sales surged in December due in part from the rush to close deals by the end of the year, commercial acquisitions collapsed anew in January 2021, with sales volume down 58% from one year ago. Acquisitions fell across all property classes: retail (-73%), hotel (-73%), office (-69%), and industrial (-57%)….


With a very dry market, acquisitions are being made on a few choice properties, indicated by the higher average price per square foot on completed transactions compared to prices one year ago.”

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Commercial Real Estate Trends & Outlook – January 2021

Commercial Real Estate Trends & Outlook is provided by the National Association of REALTORS Research Group.  

“On a year-over-year basis, sales declined by 1% in the fourth quarter of 2020 (5% in the second quarter). Leasing volume fell by 1% (4% in the second quarter). Construction activity among REALTORS® was down by 3% (6% in the second quarter). The risk spread (cap rates less 10-year T-bond) remains elevated at 6% compared to 4% prior to the pandemic.


For the first quarter of 2021, REALTORS® expect an increase in sales of land (5% y/y), industrial (3% y/y) and multifamily (2% y/y) properties. Regarding the land market, the properties with the strongest expected increase in sales are residential land (7% y/y), industrial land (5% y/y), and ranch lands (5% y/y).”

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If you have any questions about the commercial real estate market or a specific property, contact Chris Losquadro at 561.584.8555.

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Palm Beach County Commercial Real Estate

First Quarter 2021

COVID-19 continues to weigh on the commercial real estate market in Palm Beach County.  While there are some positive signs in specific markets and sectors, overall the market has been adversely impacted by the pandemic.

Following is the most updated commercial real estate market information for Palm Beach County for each of these individual sectors.

  • Commercial Office Market
  • Retail Market
  • Industrial Market
  • Multifamily Market

The information was provided by our commercial real estate valuation affiliate partner, BAAR Realty Advisors, Inc (“BAAR”).  BAAR can assist with all your commercial real estate appraisal and other valuation needs.  Please contact Chris Losquadro at Quantum Realty Advisors, Inc. for more information.

The Palm Beach County Office Market

The 57 million square foot Palm Beach County commercial office market reported a vacancy rate of 11.2% (up from 10.9% as of the year end), an availability rate of 13.4% and more than 865,000+  square feet of space under construction. The average rental rate across all classes of office properties was reported to be $35.99 per square foot which is an increase from the year end 2020 amount of $35.78 per square foot.  Net absorption during the quarter was negative 59,747 square feet. 

Significant office lease transactions during the first quarter 2021 are as follows:

  • 360 Rosemary – 53,324 square feet
  • Jupiter Medical and Technology Park – 39,000 square feet
  • Quantum Park at Boynton – 26,719 square feet

Within the previous 12 months there have been 238 commercial office transactions in Palm Beach County.  The average sale price was reported to be $302 per square foot with an average capitalization rate of 6.6%. 

Significant office sales that occurred during the first quarter 2021 are as follows:

  • Phillips Point (East Tower) – $142,045,987 or $631 per square foot
  • Phillips Point (West Tower) – $139,804,013 or $617 per square foot
  • The Boardwalk at 18th Street – $32,014,409 or $299 per square foot

Palm Beach County Retail Market

The 79 million square foot retail real estate market in Palm Beach County reported a vacancy rate of 5.0%, down from 6.3% as of the year end, with approximately 700,000 square feet of space under construction.  The average rent across all retail asset classes (malls, power centers, general retail, etc.) was reported to be $28.33 per square foot, down slightly from year end 2020.  

Significant retail lease transactions during the first quarter 2021 are as follows:

  • 1900 Midtown – 44,180 square feet
  • Arbor Square – 25,600 square feet
  • Water Tower Commons – 19,658 square feet

Within the previous 12 months there have been 211 retail property transactions in Palm Beach County.  The average sale price was reported to be $337 per square foot with an average capitalization rate of 6.0%. Significant retail sales transactions that occurred during the quarter are as follows:

  • Cobblestone Commons – $37,546,915 or $510 per square foot
  • 215 – 233 Worth Avenue – $16,989,440 or $1,410 per square foot
  • 225 Worth Avenue – $14,389,347 or $1,410 per square foot

Palm Beach County Industrial Market

At this time the 65 million+ square foot Palm Beach industrial real estate market reports a vacancy rate of 4.5%, up from 4.4% as of year end 2020.  The 6.7% availability rate is slightly lower than year end (7.2%) with approximately 700,000 square feet of space under construction.  The average market rent across all industrial asset classes (flex, distribution, etc.) was reported to be $12.55 per square foot, up from $12.49 per square foot as of year end.

Significant industrial lease transactions during the first quarter 2021 are as follows:

  • 401 Cleary Road – 31,707 square feet
  • 1195 S. Congress Ave – 29,000 square feet
  • 3402 – 3430 Quantum Boulevard – 16,936 square feet

Within the previous 12 months there have been 201 industrial property transactions in Palm Beach County.  The average sale price was reported to be $139 per square foot with an average capitalization rate of 7.0%. Significant industrial sales that occurred during the first quarter 2021 are as follows:

  • 7233 Seacrest Boulevard – $17,000,000 or $126 per square foot
  • 5801 Congress Ave – $15,000,000 or $234 per square foot
  • 160 Yamato Road – $6,660,000 or $133 per square foot

Palm Beach County Multifamily Market

At this time the 70,000+ unit multifamily apartment market in Palm Beach County reports a vacancy rate of 6.6%, down from 8.2% as of year end 2020.  Approximately 4,100 units are under under construction at this time and the average asking market rent across all multifamily asset classes was reported to be just over $1,788 per unit.  

Within the previous 12 months there have been 85 multi-family property transactions in Palm Beach County.  The average sale price was reported to be $251,793 per unit with an average capitalization rate of 6.2%, down from 6.4% as of the year end 2020.

Significant multifamily sales during the first quarter 2021 are as follows:

  • Seabourn Cove – $143,000,000 or $313,596 per unit
  • The Heritage at Boca Raton – $81,050,000 or $326,814 per unit
  • The Point at Royal Palm Beach – $72,000,000 or $268,656 per unit

If you have specific questions about the commercial real estate market or how we can help with your commercial real estate needs, contact Chris Losquadro at 561.584.8555.

Contact Chris Losquadro

 

 

 

 

South Florida Commercial Real Estate Market Report

First Quarter 2021

 

Click here to see the most recent Residential Real Estate Market update

 

 

Disclaimer:  The data for this market update was obtained from sources deemed to be reliable, is not guaranteed. No warranty or representation, expressed or implied, is made as to the accuracy contained herein and submitted subject to errors, omissions and other conditions.