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.”