While Miami’s office market showed considerable strength as the calender flipped to 2012, landlords in South Florida’s other two counties are reeling. Despite optimism heading into 2011, office vacancy rates and rents barely wavered from their weak standings at the end of the year, according to a report released by Commercial Florida Realty Services of Boca Raton.
The office vacancy rate in Palm Beach County during the fourth quarter was 22.9 percent, the same level recorded at the end of 2010, and about two-tenths of a percentage point higher than the third quarter of 2011. Rents were also exactly the same on a year-over-year basis at $17.83, though slightly higher than the $17.71 average per square-foot in the third quarter (see chart above).
The Palm Beach market performed the best in the county with a vacancy rate of just 19.4 percent, trailing Jupiter and Boynton Beach slightly, and average rents surpassing $40 per square-foot — more than any other submarket. Delray Beach, on the other hand, has a vacancy rate of 45.5 percent and a leasing price of just $13.75.
In Broward the vacancy rate dropped to 16.6 percent from 17 percent during the prior-year quarter, and 17.2 percent during the third quarter of 2011. But the average weighted rent was down to $16.96 during the fourth quarter of 2011, from $17.41 in 2010 and $17.20 during the previous quarter (see chart below).
Plantation had the strongest office submarket in the county, with a vacancy rate of just 13.8 percent and rents reaching $19.69, the highest in the county.
Though both Palm Beach and Broward counties experienced a high volume of activity, according to the report, the flat fundamentals indicate that “space demanded by new tenants entering the market nearly met the amount vacated by those leaving.”
The Palm Beach Post today had quotes from several brokers who say that landlords who once held out for high prices expecting a turnaround, have given up hope and are finding ways to ink creative, short-term leases. — Adam Fusfeld