COMMERCIAL REAL ESTATE

Commercial Market Insights – August 2021 

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

” On the whole, the commercial real estate market is undergoing a strong recovery although the recovery is starkly bifurcated across property and geographic markets.

The commercial real estate market, particularly the office market, faces increasing headwinds from the negative impact of the surge in Delta variant cases on the economy (92% of counties have substantial to high levels of transmission according to CDC).
Manufacturing production and new orders, an early indicator of economic growth, is slowing. Businesses have pushed back office re-entry plans. Visits to places of recreation like parks is also waning. Expect elevated vacancy rates in the office market but low vacancy rates in the multifamily, industrial, and retail market in the next 12 months.”

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Commercial Market Insights – July 2021 

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

Acquisitions of investors of commercial real estate rose acquisitions rose 34% in the first half of 2021. Commercial prices continued to recover, with property valuation just 1% below the valuations prior to the pandemic at a broad level. With prices firming up, cap rates continued to compress across all property types, with the lowest cap rates for apartment and industrial property acquisitions.

Barring a major resurgence of coronavirus cases arising from the delta variant that could lead to another economic shutdown, NAR Research anticipates that sales and commercial leasing will continue to expand in 2021 and more strongly in 2022. However, given the large loss in office occupancy and the office construction in the pipeline, the office vacancy rate will likely continue to remain elevated at the current level throughout 2022″.

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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.

 CLICK HERE TO READ THE ENTIRE REPORT  

 

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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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

Third Quarter 2021

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 is one of the best performing markets not only in Florida but throughout the nation.  Vacancy was reported to average 9.7% (down from 10.8% as of the end of the second quarter), an availability rate of 11.6% 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 $36.69 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 30,023 square feet. 

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

  • Broken Sound Plaza B – Phase II –  77,340 square feet
  • Public Storage – 45,400 square feet
  • Universit Centre – 40,000 square feet

Within the previous 12 months there have been 321 commercial office transactions in Palm Beach County.  The average sale price was reported to be $319 per square foot with an average capitalization rate of 6.2%. 

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

  • 1 Town Center Road – $99,500,000 or $520 per square foot
  • 1905 Medical Center – $50,000,000 or $500 per square foot
  • Bank of America Tower – $44,600,000 or $407 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 4.6%, down from 5.0% as of the year end, with approximately 450,000 square feet of space under construction.  The average rent across all retail asset classes (malls, power centers, general retail, etc.) was reported to be $29.96 per square foot, up slightly from year end 2020.  

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

  • Delray Square – 51,727 square feet
  • Wellington Plaza – 26,584 square feet
  • Shadowood Square – 25,632 square feet

Within the previous 12 months there have been 288 retail property transactions in Palm Beach County.  The average sale price was reported to be $308 per square foot with an average capitalization rate of 4.9%. Significant retail sales transactions that occurred during the quarter are as follows:

  • Bermuda Cay – $21,175,000 or $174 per square foot
  • Publix Gateway Blvd – $11,899,828 or $97 per square foot
  • Dollar General Plaza – $11,750,000 or $254 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 3.4%, down from 4.5% as of year of the first quarter 2021.  The 4.1% availability rate is lower than year end (6.7%) with approximately 900,000 square feet of space under construction. The average market rent across all industrial asset classes (flex, distribution, etc.) was reported to be $13.08 per square foot, up from $12.75 per square foot at the end of the second quarter.

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

  • 362 N. Haverhill Road- 63,000 square feet
  • 1315 North Jog Road – 53,250 square feet
  • 5479 Leeper Drive – 51,702 square feet

Within the previous 12 months there have been 267 industrial property transactions in Palm Beach County.  The average sale price was reported to be $140 per square foot with an average capitalization rate of 6.7%.

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

  • 7233 Seacrest Boulevard – $26,000,000 or $193 per square foot
  • Landmark Commerce Center – $15,713,777 or $176 per square foot
  • 6600 High Ridge Road – $8,200,000 or $171 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 3.6%, down from 5.3% as of the end of the prior quarter.  Approximately 5,600 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 $2,188 per unit.  

Within the previous 12 months there have been 125 multi-family property transactions in Palm Beach County.  The average sale price was reported to be $278,105 per unit with an average capitalization rate of 5.7%, down from 6.0% as of the prior quarter.

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

  • Courtland Uptown Boca – $230,000,000 or $504,385 per unit
  • One Boynton – $171,000,000 or $346,153 per unit
  • Pacifica – $92,675,000 or $286,033 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

 

 

 

 

NAR Commercial Real Estate Metro Market Report

Palm Beach County – Third Quarter 2021

(click the image to download the PDF report)

 

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.