Palm Beach Office Market
Annual full-service asking rental rates remained near the historical high set in the previous quarter with the second quarter of 2024 closing at $48.22/SF, a 5.9% increase year over year. Occupancy turned negative in the second quarter, pushing vacancy to increase by 90 basis points year over year to 14.1%. The under-construction pipeline continued to remain active, with 683,223 SF scheduled to deliver within the second half of 2024. However, there are at least three new office projects that have been proposed totaling approximately 1.5 MSF, one of which is slated to break ground by the end of the year. Total leasing activity closed the quarter at 528,810 SF, averaging 2,922 SF per deal and reflecting an average of 1,126 SF less than a year ago. In terms of the number of deals done, leasing activity fell 32.7% year over year.
Download Palm Beach Office Report 2Q24Palm Beach Industrial Market
The market realized 211,066 SF of positive absorption in the second quarter of 2024, a 17.1% year over year increase. Overall rental rates increased by 5.3% quarter over quarter and by 3.5% year over year to $13.59/SF. Construction deliveries in the second quarter of 2024 totaled a record high 1.4 MSF while another 449,513 SF remains under construction. Supply greatly exceeded demand this quarter due to record high deliveries, which pushed the vacancy rate up by 220 basis points quarter over quarter to 8.4%. However, vacancy has only increased by 240 basis points year over year, indicating that vacancy was normalized prior to the influx of new supply.
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