Palm Beach Real Estate Market Reports

Palm Beach Office Market

Annual full-service asking rental rates reached an all-time high in the first quarter of 2025 closing at $50.66/SF, reflecting a 0.6% increase quarter over quarter. Occupancy remained positive in the first quarter; however, the delivery of Banyan & Olive, One Flagler, and Sundy Village last year has kept the vacancy rate elevated at 15.2%, reflecting a 190 basis points increase year over year. The under-construction pipeline increased with the 210,000-SF project, One West Palm, scheduled for delivery late in the first half of 2025. One West Palm is currently 90.1% preleased. Sister projects, 10 City Place and 15 City Place are also under construction, collectively totaling over 1.0 MSF of office space. Total leasing activity closed the quarter at 519,750 SF, averaging 2,463 SF per deal and reflecting a 706-SF decrease in average deal size year over year. Meanwhile, the number of leases signed fell by 17.3% year over year.

Palm Beach Industrial Market

In the first quarter of 2025, the market experienced a reversal from the positive demand trend observed since 2019. The area reported 65,384 SF of negative absorption, largely attributable to tenants delaying occupancy to build out their spaces, positioning the market for stronger absorption in future quarters. Overall rental rates increased by 5.4% year over year to $13.65/SF. There were no new construction deliveries in the first quarter of 2025, but projects under construction increased to 918,900 SF. Negative demand coupled with no new supply pushed vacancy up by 10 basis points quarter over quarter to 7.8%. Vacancy increased by 210 basis points year over year, indicating that the rising vacancy is primarily attributed to the 1.9 MSF of new deliveries that took place in 2024.