Palm Beach’s exclusive Worth Avenue — the Rodeo Drive or Madison Avenue of Florida — was hit hard in the downturn, but its high-profile facelift, which was finally completed in November, has retailers optimistic and customers showing up with open wallets.
The town initiated a $16 million plan, devised by attorney Harvey Oyer, to completely renovate the infrastructure and facades of the streets, including installing a new fountain and clock tower. The project took about seven months to complete.
“I think [the renovation] has already had an impact,” said Sherry Frankel, president of the Worth Avenue Association and owner of Sherry Frankel’s Menagerie at 256 Worth Avenue. “I think it’s brought out a lot of curiosity-seekers, and I think it’s put everyone in such a good mood.”
The area was hit hard due to many Palm Beachers being victims of the Madoff Ponzi scheme.
“It was not only the downturn but Madoff, particularly, that made a huge impact,” Frankel said. “[Palm Beach] was the core group.”
Improving retail on Worth Avenue is part of a larger trend that has seen Palm Beach County as a whole vault into a strong position in the South Florida retail market, said Chris Macke, senior real estate strategist at CoStar.
Macke said that Palm Beach’s strongest industries, like education and healthcare, did better through the downturn than Miami, where the hard-hit trade sector is 25 percent of its employment base.
“What we’re seeing is stabilization,” he said. “Even more important than the [retail] vacancy rate going down, there’s positive absorption, which we’ve seen for four to five to six quarters. So that’s a real improvement.”
Still, the town of Palm Beach as a whole, which is anchored by Worth Avenue, has a vacancy rate of 9.6 percent, with rents of $23.81 per square foot, both the highest in the county, according to CoStar.
County-wide, the vacancy rate is 8.1 percent.
“Part of [the higher rate] is that it might naturally be higher than the rest of the county,” Macke said. “I would speculate it’s more to do with the natural rate of employment, the natural rate of vacancy for different markets. Part of it might be structural; for whatever reason that’s what Palm Beach seems to hover around.”
Macke, though, said he thought the facelift would have a positive impact.
“Certainly, for an area like Palm Beach, given their income levels, and the types of retailers they have in Worth Avenue, it certainly will help,” he said. “It’s just a matter of in what time frame.”