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Market Report

West Palm Beach Industrial

Second Half 2019

Limited Development Emphasizes Importance of Existing Space, Keeping Vacancy Low and Motivating Investment

 

Construction constraints slow leasing while underlying demand stays positive. Population growth that is more than double the national pace continues to support the need for local logistical services even as key transportation routes facilitate more widespread distribution from the port. While these industrial demand factors remain strong, a lack of available land is slowing construction activity. Annual completions will fall to a five-year low in 2019 as few large-scale facilities open. A 220,000-square-foot warehouse in Jupiter mark’s this year’s biggest delivery. Several smaller projects are underway, however, including nine buildings in the Palms West Commerce Park, comprising about 27,000 square feet in total. The lack of substantial development and minimal availability of less than 2 percent in several submarkets is limiting leasing activity as companies search for suitable floor plans. Subdued net absorption is pushing the metrowide vacancy rate up from the historical low recorded last year while also moderating how much asking rents are changing. Less turnover of space on the market is resulting in a more modest sub-1 percent increase in the average monthly payment this year following a nearly 3 percent gain in 2018.

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