West Palm Beach industrial real estate market reports
West Palm Beach’s industrial market remains steady as net absorption stays positive and rent growth continues at a healthy pace. New deliveries have placed upward pressure on vacancy; however, it is expected to be temporary.
Construction starts in the third quarter pushed total under-construction inventory in West Palm Beach to 1,235,208 sf. The largest project to break ground, Southern Way Business Center at 433,671 sf, is already a third leased with two tenants planning to occupy one of the property’s three buildings.
West Palm Beach gained 227,535 sf of net absorption in the third quarter, lifting the year-to-date absorption to 371,229 sf year-to-date. While slightly outperforming the previous two quarters, annual absorption is still lagging behind pre-pandemic activity.
Direct asking rent
Rents grew by 4.2% to $12.76 psf in the third quarter, down from the 6.9% growth between the first and second quarter.
Combined direct and sublease availability fell nearly 600,000 sf to 1,859,228 sf in the third quarter. This puts direct availability less than 200,000 sf below where it was at year-end 2021.
Vacancy dipped by 0.4 percentage points in the third quarter to 3.8%, with submarkets in the I-95 corridor outperforming their neighbors. In Palm Beach, for example, vacancy has fallen to 0.2%.
Sublease availability, at only 138,945 sf or 0.3%, is limited and primarily in the warehouse and distribution category. Nonetheless, this represents the highest sublease availability for the market since 2011.
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