COMMERCIAL REAL ESTATE

Commercial Market Insights – June 2021 

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

“The commercial real estate market continues to climb out from the economic fallout of the COVID-19 pandemic. Commercial real estate acquisitions during January through May 2021 rose 1% compared to one year ago as investors acquired multifamily properties, hotels, and seniors housing.

 Commercial real estate prices continued to firm up on a broad level, with prices now just 1% below year-ago levels, after falling by as much as 10% one year ago. Cap rates have continued to compress downwards by about a percentage point from one  year ago, with the lowest cap rate in multifamily property acquisitions.

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

Contact Chris Losquadro

 

 

Palm Beach County Commercial Real Estate

Second 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 58 million square foot Palm Beach County commercial office market reported a vacancy rate of 10.8% (down from 11.2% as of the year end of the first quarter), an availability rate of 12.9% and more than 550,000  square feet of space under construction. The average rental rate across all classes of office properties was reported to be $36.32 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 116,207 square feet. 

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

  • 360 Rosemary –  40,422 square feet
  • CityPlace West Palm Beach – 25,142 square feet
  • Phillips Point – 20,236 square feet

Within the previous 12 months there have been 296 commercial office transactions in Palm Beach County.  The average sale price was reported to be $318 per square foot with an average capitalization rate of 6.5%. 

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

  • CityPlace Office Tower – $175,000,000 or $572 per square foot
  • One Clearlake Center – $60,700,000 or $275 per square foot
  • Gardens Plaza – $30,550,000 or $347 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 4.8%, down from 5.0% as of the year end, with approximately 570,000 square feet of space under construction.  The average rent across all retail asset classes (malls, power centers, general retail, etc.) was reported to be $28.79 per square foot, up slightly from year end 2020.  

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

  • Pine Trail Square – 23,632 square feet
  • Delray Commons – 23,450 square feet
  • Downtown at the Gardens – 20,509 square feet

Within the previous 12 months there have been 265 retail property transactions in Palm Beach County.  The average sale price was reported to be $329 per square foot with an average capitalization rate of 6.0%. Significant retail sales transactions that occurred during the quarter are as follows:

  • Charley’s Crab – $26,070,000 or $2,907 per square foot
  • Addison Place / South – $18,956,311 or $729 per square foot
  • Addison Place / North – $17,427,809 or $721 per square foot

Palm Beach County Industrial Market

At this time the 66 million+ square foot Palm Beach industrial real estate market reports a vacancy rate of 4.1%, up from 4.5% as of year of the first quarter 2021.  The 5.1% availability rate is lower than year end (6.7%) 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 $12.75 per square foot, up from $12.55 per square foot at the end of the first quarter.

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

  • 1301 President Barack Obama Hwy – 120,282 square feet
  • 6051 Southern Boulevard – 48,616 square feet
  • 15335 Park of Commerce Blvd – 36,050 square feet

Within the previous 12 months there have been 257 industrial property transactions in Palm Beach County.  The average sale price was reported to be $133 per square foot with an average capitalization rate of 7.0%. Significant industrial sales that occurred during the second quarter 2021 are as follows:

  • 6100 Park of Commerce – $11,600,000 or $129 per square foot
  • 701 Park of Commerce – $10,500,000 or $132 per square foot
  • Baron Sign – $8,500,000 or $237 per square foot

Palm Beach County Multifamily Market

At this time the 72,000+ unit multifamily apartment market in Palm Beach County reports a vacancy rate of 5.3%, down from 6.6% as of the end of the prior quarter.  Approximately 4,000 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 $1,969 per unit.  

Within the previous 12 months there have been 98 multi-family property transactions in Palm Beach County.  The average sale price was reported to be $252,052 per unit with an average capitalization rate of 6.0%, down from 6.2% as of the prior quarter.

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

  • Town Southern – $119,365,000 or $304,502 per unit
  • Alta Congress – $111,750,000 or $302,845 per unit
  • 500 Ocean – $105,000,000 or $307,917 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.