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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.

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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.”

VIEW THE PUBLISHED ARTICLE | VIEW THE FULL FALL 2020 ISSUE

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MHC Listed as #2 Property Management Firm in Palm Beach County

The South Florida Business Journal released their 2020 Top List of South Florida Commercial Property Management Firms ranked by square foot managed.

We’re proud to be listed as the #2 firm within Palm Beach County and wish a hearty congrats to all other firms listed!

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Good property management ensures happy tenants and owners while maintaining the value of real estate assets. We pride ourselves on our reputation of well-maintained and managed office, industrial, retail and corporate facilities.

How can we help you? NAI/Merin Hunter Codman is one of South Florida’s leading commercial real estate firms and the largest in Palm Beach County. We have over three decades of experience advising clients on strategic acquisitions and dispositions and providing landlord representation, tenant representation, property management, and construction management services. The firm has expertise in all commercial property sectors including office, retail, industrial, multifamily, hotels, and land. To learn more about our services click here.

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The Future of Office Space

Click here to view the article and video, originally published by WPBF.

More and more people are working from home because of the pandemic and that means fewer people are renting office space.

Real estate experts admit the future of the business is uncertain.

“The biggest problem in leasing office space right now is people’s inability to make a decision, because we just don’t know what the future looks like,” Neil Merin, Chairman NAI/Merin Hunter Codman.

Some in the industry say they see opportunities.

“I’d love to be a part of an office building that converted to medical,” Rebecca Giacobba, Team Leader Illustrated Properties, GIA Realty, said. “I’d love to be a part of a big group from New York that wants to get out of the city to invest in Palm Beach County.”

Giacobba said, nationally, rental rates are holding at about 88%.

Merin believes we will see people telecommuting and partially working in an office.

“Working from home has not been convenient for everybody, but right now one of the biggest problems with bringing the workforce back, forget about COVID, is kids,” Merin said. “Because kids are out of school.”

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Neil Merin Named 2020 Power Leader in Real Estate – 3rd Year in a Row!

The following is an excerpt from the original article which can be found here.

Ever since South Florida was pioneered in the 1800s, real estate has shaped the region’s economy. More than 100 years later – through depressions, recessions, and economic tumult – that continues to be the case.

The persistent force behind the local real estate market remains the property owners, developers and real estate brokers who power what remains a significant driver in the South Florida economy.

Though persistent, the individuals reflect the uniquely dynamic nature of South Florida’s real estate marketplace. While 39 are making at least their fifth appearance on the list, 15 are newcomers to the list. Most are frequently mentioned in the pages of the South Florida Business Journal, as they make their mark across the community.

As South Florida emerges from the fallout of recent events, these modern-day pioneers will be the ones who continue to shape the region’s economy and our future successes.

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NEWS PICK-UPS: Golden Bear Plaza Acquisition

A few media organizations have picked up our Press Release on the recent acquisition of Golden Bear Plaza in Palm Beach Gardens.

CoStar: View Link | View PDF

South Florida Business Journal: View Link | View PDF

The Real Deal: View Link | View PDF

Commercial Property Executive: View Link | View PDF

RE Business Online: View Link | View PDF

Globe Street: View Link | View PDF

Daily Business Review: View Link | View PDF

CRE News: View Link | View PDF

BOMA: View Link | View PDF

Business Development Board: View Link | View PDF

Boca Tribune: View Link | View PDF

Palm Beach Chamber North: View Link | View PDF

Boca Chamber: View Link | View PDF

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Billionaire Jeff Greene battles with WPB mayor over unfinished office building

The following excerpt was originally written by Katherine Kallergis and Keith Larsen of The Real Deal. Click here to view the full article.

Two weeks ago, billionaire developer Jeff Greene threatened to stop construction of a two-tower, 30-story mixed-use project in downtown West Palm Beach.

Jeff Greene and a rendering of 550 North Quadrille Boulevard (Credit: Arquitectonica International via Facebook)

Greene, who told the Palm Beach Post in late April that he would “leave the shell up” because the city was resistant to approve a zoning request, is changing his tune. Now, he’s saying that he will build the project at 550 North Quadrille Boulevard as is, but at a slower pace, if he can’t get the property rezoned. Greene wants to change the project’s zoning from hotel, office space and multifamily to all multifamily.

West Palm Beach’s Central Business District has 673,350 square feet of Class A office space under construction, with an average asking rent of $54.39 per square foot, according to Colliers International South Florida’s first quarter report.

Neil Merin, chairman of the commercial real estate firm NAI Merin Hunter Codman, said the city has shown that it can only absorb one new Class A office building every 10 years.

To go forward with the office component of the One West Palm project “seems to be silly,” Greene said. He’s already invested $100 million into construction.

Want to read the full story? View PDF | View Link

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NEWS PICK-UP: Coronavirus Florida; One West Palm complex, partly built, could halt construction for years

The following excerpt was originally written by Alexandra Clough of The Palm Bach Post. Click here to view the full article.

Photo by: Greg Lovett/palmbeachpost.com

A $250 million twin-tower complex in West Palm Beach is likely to stop construction within days, leaving the city with skeletal towers that could stand as unbuilt eyesores for the next decade.

Palm Beach billionaire Jeff Greene, who is developing the 30-story One West Palm apartment-hotel-office complex, said on Tuesday he is about to pull the plug on construction, three stories shy of reaching the top, because the city is pushing back against his request for a zoning change.

Greene wants to build apartments in a northeast tower, rather than the offices and hotel slated for the space. The southwest tower already is approved for 328 apartments.

With the coronavirus pandemic putting a halt to tourism and shuttering offices nationwide, office space and hotel rooms no longer work, Greene said. He said financing sources for the 200,000 square feet of office and 201-room hotel have collapsed, and a hotel partner withdrew.

Even before the pandemic, Greene said his real estate brokerage could not find even one office tenant willing to lease space in the project, a reflection of the market’s thin demand for new office space downtown.

Real estate experts said Greene’s concerns about office space are valid.

Last year, experts began warning that West Palm Beach’s downtown office market was loaded with empty space, even though business leaders insisted the city needed more space to lure employers.

The city’s existing offices buildings, including its Class A towers, had floors of vacant sublease space. This resulted in a shadow vacancy rate of about 17 percent downtown, said Neil Merin, chairman of NAI/Merin Hunter Codman in West Palm Beach.

Historically, downtown West Palm Beach can only absorb one new office tower every 10 years, Merin said. In addition to One West Palm, the 300,000-square-foot 360 Rosemary office tower also began construction last year.

With businesses alarmed by the pandemic or financially damaged by the tumbling economy, the outlook for urban office leasing is unpredictable.

Some theories predict office tenants will flock to less dense, suburban offices, Merin said.

Others predict companies will shrink their office space to save money on overhead while continuing to let employees work from home.

Want to read the full article? View PDF | View Link

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