The following article was originally published in The Palm Beach Post by Alexandra Clough. View Article | View PDF
Real estate brokers are growing concerned that top tier office buildings have too much shadow sublease space.
Even as another project is up for consideration, West Palm Beach’s downtown office market is loaded with empty space, and there is little demand from tenants outside the area wanting to lease large offices, real estate professionals say.
Interviews with real estate developers and brokers indicate that the city’s Class A office buildings, which typically attract the top tenants, have plentiful space available directly from the buildings, or from office tenants that are trying to sublease their space.
WEST PALM BEACH, Fla. (May 10, 2019) – A collection of
some of Florida’s leading commercial and residential real estate developers,
architects, and urban planning experts gathered today to speak to a crowd of
almost 300 about real estate trends, opportunities and related issues at the
Urban Land Institute (ULI) West Palm Beach Development and Investment Forum at
the Hilton West Palm Beach.
Chairman Neil Merin, of NAI/Merin Hunter Codman,
kicked off the three-hour program by itemizing the highlights of more than $3
billion worth of new investment in West Palm Beach either underway or planned.
This includes 2,336 hotel rooms, 3,520 residential units, 1,310,000 sq.
ft. of new Class A office space and Hospital for Special Surgery’s first
expansion outside its home base in New York. These investments are
“game-changers for the city,” according to Raphael Clemente, executive director
of the West Palm Beach Downtown Development Authority, a co-sponsor of the
event with ULI. “The entire city is flourishing, and downtown development is
the most intense it’s been since the days of Henry Flagler. The big difference
is that today, our planners are steering the kind of growth that advances the
quality of life for all.”
“All of the new Class A office space will help stabilize rates and allow us to fulfill the demand from out-of-market companies looking to locate here,” Merin said. The new residential units and major commercial projects have contributed to a recent increase in the city’s tax base of 13.5 percent, he added, a number that is expected to keep rising. He also cited the extensive recent upgrades to some of the city’s cultural institutions bringing them to world-class levels, especially the Norton Museum of Art and the Kravis Center for the Performing Arts. “Investment in arts and culture adds real value to the continued viability of the real estate market. There is a direct correlation.” (Click here to view a slideshow of his presentation.)