WPB Isn’t Worried About Downtown Office Space

The following is an excerpt from an article originally published in The Palm Beach Post by Alexandra Clough. VIEW LINK | VIEW PDF

The city of West Palm Beach is not worried about the future of office space in the city’s downtown. This is despite a glut of new space about to hit the market, an unsightly half-finished office complex and a lingering pandemic that has kept most workers at home for months.

Lannis Waters, The Palm Beach Post

In West Palm Beach, only about 20% of workers are coming in to the office, brokers said. Other workers are coming in on staggered days so as not to crowd interior spaces and risk spreading the airborne COVID-19 virus.

As a result, a number of companies are paying for leased space that is mostly empty, prompting questions about the future of office space. Some national companies, such as Twitter, have told employees they can work from home forever.

But West Palm Beach officials remain upbeat that people will return to the office, and the market will return.

“Though there is current uncertainty due to the upcoming presidential election and COVID-19, all indications suggest the office market will rebound,” said Kathleen Walter, a city spokeswoman.

Last December, prior to the pandemic, commercial real estate brokers warned there was a sizable shadow market of empty space downtown.

Neil Merin, chairman of NAI/Merin Hunter Codman, said that with two new office towers under construction, the amount of vacant space would rise to 35% from about 17%. Other brokers said leasing activity was very slow, and no large tenants were even making inquiries about office space.

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The Future of Office Space

The following article was published in the Fall 2020 Palm Beach County Quarterly Economic Development Magazine from the Business Development Board of Palm Beach County.

Palm Beach County’s office market may wind up benefiting from the changing national work-from-anywhere landscape. “I believe our market will be more attractive to companies from the crowded Northeast seeking to relocate here,” said Jeffrey M. Kelly, executive vice president, CBRE in Boca Raton. “But in the short-term, availabilities will increase. I believe this is a hiccup and am optimistic that we will recover.”

Neil Merin, Chairman, NAI/Merin Hunter Codman in West Palm Beach, says the work-from-home trend due to the COVID-19 health threat has shown that people don’t have to be in a large office to stay connected. “Owners and executives with small offices in Palm Beach County are finding they can spend more time here,” Merin said. “That portends more movement away from the big Northeast cities to offices here.”

Meanwhile, the need for social distancing at work may change the size and configuration of office spaces, added Merin. While some businesses may downsize and try to sublet their current space, others will retain their current footprints, even if there are fewer employees on the premises at any one time.

“There will be lower demand for co-working spaces until the pandemic has receded,” Merin said.

Another trend will be the need to provide healthy office workspaces, including stepped-up sanitation and ventilation systems. “When employees are spending eight or 10 hours a day in an office, they want to feel safe,” he added. Common areas like kitchens and lounges may also need to be reconfigured for employees taking a break during the day.

Jeff Kelly expects a lower employee headcount in office spaces to drive down the need for on-site parking. “That’s a positive because land in Palm Beach County is so valuable,” he said. “It may lead to some creative uses of that extra space.”

As for new construction, Jeff Kelly said some buildings under construction, like 360 Rosemary in West Palm Beach, are likely to be completed on schedule, while others may be delayed until preleasing commitments support the financial investment. “Fortunately, Palm Beach County is not a big office market, and a few major leases could move the vacancy rate downward significantly.”

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PRESS RELEASE: Lockdowns Have Not Locked Up Commercial Real Estate Transactions

— Two of NAI/Merin Hunter Codman’s commercial real estate experts discuss what it takes to close transactions during the COVID-19 pandemic. —

West Palm Beach, Fla. – NAI/Merin Hunter Codman, Palm Beach County’s leading commercial real estate firm, acknowledges that commercial real estate transaction activity has slowed throughout the first six months of the COVID-19 pandemic but the firm notes that it has not been locked down entirely. Two of the firm’s seasoned veteran brokers, retail expert Bruce Corn and office market specialist Adam Starr, have successfully completed nearly $10,000,000 in lease and sale transactions while most of South Florida’s shelter-in-place mandates remain in place. The secret to their success has been what they have always done… servicing their long-time clients with updated market intelligence and creative deal making options.

Bruce Corn

Long-time office veteran Adam Starr and retail expert Bruce Corn represent two different commercial real estate market sectors, but they have two things in common – expertise in navigating positive and negative market cycles, as well as long-term, trusted client relationships.

Local office market expert, Adam Starr, who joined NAI/Merin Hunter Codman in January 2020, just six weeks prior to the pandemic shutdown, has facilitated transactions in excess of $5.4 million on behalf of his clients, completing lease transactions in excess of $4.5 million and one building sale in Jacksonville, on behalf of a long-time local client, for $910,000, completed just last week.

Adam Starr

Bruce Corn, who has led NAI/Merin Hunter Codman’s retail services for nearly 30 years, has completed both sales and lease transactions totaling over $5.5 million on behalf of his clients.

Brokerage Press Releases Transactions