West Palm Beach industrial real estate market reports
West Palm Beach’s industrial market continued further growth during the third quarter with net absorption reaching an all-time high almost entirely due to Amazon taking occupancy of a 1-million-sf distribution facility. Demand for class A logistics space remains robust and asking rents have increased dramatically amid dwindling supply of quality distribution product.
South Florida’s economy continued to rebound during the third quarter with the unemployment rate declining to 5.6% as of August 2021, an 810-basis point drop from the high of 13.7% in May 2020.
According to recently released 2Q21 data from the Bureau of Economic Analysis, Florida’s GDP grew by 6.7 percent over the quarter, which is on par with the average for the U.S.
Net absorption is at an all-time high of 1.8 million sf at the end of the third quarter. While demand has been steady, the gain in absorption was almost entirely due to Amazon taking occupancy of 1 million sf at its newly completed distribution facility in the Palm Beach Park of Commerce in North Palm Beach.
The overall vacancy rate for the West Palm Beach industrial market resumed a downward trend during the third quarter and declined to 4.3%, a 180-basis point decrease from its peak of 6.1% at year-end 2020.
Asking rents have increased by 14.8% since year-end 2019 to $10.75 per sf. Tightening leasing fundamentals as well as new speculative deliveries and rising construction costs have all contributed to a steady rise in asking rates.
Capital marketsIndustrial asset pricing has begun to recover after softening mid-way through 2020. As of September 2021, pricing is up by 2.9% from pre-COVID levels.
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