on the MOVE
market snapshot PALM BEACH ByNatalieKeith
OFFICE RENTAL RATES RISE, AS DOES VACANCY
With demand softening and the continued tightening of the credit markets, office property fundamentals are
beginning to shift in Palm Beach and
Broward Counties.
According to CB Richard Ellis office market reports for the third quarter of 2007, the Palm Beach County
vacancy rate rose to 11.9% during the
quarter, up from 8.4% recorded during the same three-month period in
2006. In Broward County, the vacancy rate was 9.5% for the quarter,
up from 8.3% a year ago.
Despite the uptick in vacancies,
rental rates are on the rise or stabilizing. In Palm Beach County, third-quarter average asking rental rates
ated 17,700 jobs last year, reflecting a
3% increase over 2006. In Broward
County, experts were predicting the
creation of 7,900 jobs during the year,
reflecting a 1% increase.
Unemployment trends in the area
compared favorably with state and
national averages. According to the
Bureau of Labor Statistics, Florida’s
statewide jobless rate measured 4.2%
in late 2007, a full percentage point
higher than record low unemployment earlier in the year, yet below the
US average of 4.9%. Palm Beach
County’s unemployment rate rose
during the year to 4.7% from 3.3%,
while Broward County’s rate rose to
3.8% from 2.9%.
Alan Karrh has been appointed by Regency
Centers as vice president of investments at
the company’s Palm
Beach office. He is
charged with identifying
Karrh market opportunities for
new shopping centers
for the Jacksonville-based developer.
Karrh was with Core Communities in
Port St. Lucie as commercial group
president.
Peter Mekras has been
appointed managing director of Aztec Group
Inc. He joined the company in 2003 and has
more than $1 billion
worth of multifamily
transactions to his Mekras
credit. Based in Miami,
Aztec specializes in real estate investment and financing.
Despite the shifting conditions, experts are
predicting that job growth will continue to
buoy demand for office space, although at
a slower pace than recent years.
CB Richard Ellis has promoted Bruce Gibson to
SVP. Gibson heads the
Miami-based seniors
housing group and oversees nationwide investment sales, acquisitions
and financing of seniors
housing facilities.
Gibson
increased to $19.90 from $18.93 during the same period in 2006. In
Broward County, the overall direct
average asking rates for class A properties remained stable over the year at
$17.71 per sf and, for class B properties, dipped slightly to $14.98 per sf.
Despite the shifting conditions, experts are predicting that job growth
will continue to buoy demand for office space, although at a slower pace
than recent years. According to a
Marcus & Millichap Real Estate Investment Services office research report, employers in Palm Beach
County were expected to have gener-
Office brokers believe 2008 will be
a good time to be a tenant in South
Florida.
“Net rental rates have stabilized for
both A and B class properties and
landlord concessions are returning,”
says Paul Marko, first VP of CB
Richard Ellis’ global corporate services group. “Operating expenses seem
less volatile now that the properties
have been reassessed and insurance
costs have stabilized. Construction
costs are also down due to reduced
labor and raw materials costs, so tenant improvement dollars should go a
little further.”
Owen Duke of Patrinely Group LLC has
been appointed head of the Southeast
region at the company’s Plantation office. Duke was executive managing director of Patrinely’s Crimson Services
mortgage affiliate in Bethesda, MD.
matter of FACT
South Florida’s ranking
among the nation’s most
cost-effective markets in
which to run a corporate headquarters, according to Boyd Co. Inc.
Operating costs in the Miami/Ft. Lauderdale
market are $22.8 million annually.
