Q3: State of Commercial Real Estate in Palm Beach County
Written by Marisa Marulli (REMCO Communications) and Lisa Gerard (REMCO Founder)
August 2, 2021
A combination of compressed interest rates, motivated lenders, business relocations and booming residential demand has impressed a positive trend on commercial real estate in Palm Beach County in the second half of 2021.
Compressed Interest Rates
As time progresses in a months-long, near-zero interest rate environment, investors have been chasing yields in cities such as Charlotte, Dallas and Phoenix as opposed to the long-standing popular San Francisco, Los Angeles and New York. One can see how the West Palm Beach demographic fits that smaller-city yield.
We’ve seen a particular increase in activity in the industrial space, an obvious consequence of COVID-era consumer shifts from retail to e-commerce.
Motivated Lenders
On July 20th, commercial banking giant Gantry reported its first half figure of commercial real estate loans secured: $2.1 billion. With the historically low-rate environment, lenders are competing for the borrower pool with favorable terms and other incentives.
Business Relocations
West Palm Beach, Palm Beach County and South Florida are seeing an increased number of business relocations such as some of Goldman Sachs’ asset management unit making its way to the new 360 Rosemary. Others, such as financial and tech firms from New York, are accommodating employees who moved south during the pandemic by creating outposts in the area.
Near Jupiter, Amazon is finalizing development of its new, one million square foot fulfillment center, now posting new jobs on recruitment sites. A Palm Beach County Development Board member has been cited in The Palm Beach Post’s article, stating “Amazon clearly realizes that there’s a demand here in Palm Beach County.”
Booming Residential Demand
Finally, commercial real estate is benefitting from the widely-recognized increase in residential demand. With new residents coming to Palm Beach County—bidding on homes site unseen—in response to sellers finally encouraged to sell their homes, new office space is being sought by those residents as well.
Lesley Sheinberg of NAI/Merin Hunter Codman, representing the Esperante Building in West Palm Beach, spoke with Bloomberg earlier this year, stating “Every single showing this week we have there is from people up north or different states, either wanting to have a presence here, so they don’t have to commute back and forth, or wanting to get out and move their firm here.”
In conclusion, we find ourselves on top of the same bubble of growth in July in West Palm Beach’s physical structures and population.
However, given these current market factors, it is no surprise we are here.
