Broward and Palm Beach County’s industrial real estate markets looked healthy in the second quarter, according to a new report from commercial brokerage CBRE.
While new construction picked up in both counties, low vacancies continued to push rental rates higher.
Tenant demand chewed through 185,394 square feet of Broward County industrial space during the second quarter, pulling vacancy rates down to 6.1 percent, according to CBRE.
Two businesses played a major part in that absorption: Comcast Cable took up 70,000 square feet of space at the Miramar Center Business Park, and auto-part distributor WorldPac signed a deal for 64,345 square feet at the Pompano Business Center.
With leasing activity on the rise, rents continued their upward trend in the second quarter, rising slightly to $7.78 per square foot, triple net, according to the report.
Another explanation for those rising rents: not a single new industrial building was completed during the second quarter. However, two major projects are currently under construction. Bridge Sunrise, a two-building project with 306,466 square feet, is slated to finish in the first quarter of 2017. And another two-building project, the Hillsboro Technology Center, is expected to deliver its 258,732 square feet of space by the third quarter of 2016.
Palm Beach County
Demand dragged vacancies in Palm Beach County down to a nine-year low of 3.5 percent during the second quarter, according to CBRE’s report.
That low vacancy rate has helped push asking rents up to an average of $7.78 per square foot, triple net, continuing a years-long trend of gradually increasing lease rates.
Duke Realty was the sole developer to deliver new space, wrapping up construction for two buildings totaling 229,000 square feet in its massive Turnpike Crossings project.
Meanwhile, tenants ate up 116,000 square feet during the second quarter, with most of the demand stemming from service-driven small businesses enjoying new traffic from the county’s growing population. The most notable lease was signed by RMB USA, an asset management company that agreed to occupy 53,250 square feet of space at Duke’s Turnpike Crossings.
While demand is eating through what’s left of Palm Beach County’s industrial supply, another 700,041 square feet are already under construction and expected to open this year, most of which is located in West Palm Beach, according to the report.