Writer: Alejandro Sanchez
2 min read July 2021 — As some iconic business districts across the country struggle with high vacancy rates, office space in Palm Beach County has contrasted expectations of a decline and continues to attract new investment, a trend materialized by recent deals in the region.
During an interview with Invest:, Bradley Scherer, founder and president of Atlantic Western Realty Companies, noted this trend by highlighting the number of investors seeking to close deals in the office sector. “What we’ve seen in certain asset classes is the aggressive influx of new capital looking for deals. The office sector is one of those areas that has received a disproportionate amount of new investment.”
In an interview with The City Journal, President and CEO of the Business Development Board of Palm Beach County Kelly Smallridge also spoke on the desirability of Palm Beach County’s available office space, emphasizing how approximately 91 financial firms, including Goldman Sachs, have recently rented or bought office locations in the county.
Some other recent notable transactions include the acquisition by PEBB Enterprises of a 61,188-square-foot office building with 280 garage parking spaces for $18.4 million in Boca Raton. The 22-year-old structure, currently occupied by the Bank of New York, IberiaBank and Morgan Stanley, is scheduled to undergo renovations. In neighboring West Palm Beach, Tricera Capital, along with other business partners, acquired an 18-story office building with more than 220,000 square feet for $60.7 million. Some of that building’s tenants include Intech Investment Management, BB&T, CenterState Bank, Prudential and law firms Day Pitney and Rosenbaum Mollengarder.
While major corporations attempt to strike a balance between a remote or an on-site workplace, Palm Beach County has seen strong demand for office space as business relocations to the region remain consistent. On the contrary, the outlook for the traditional business district remains unknown, even as the overall economy is progressively reactivating. In Downtown Manhattan, for example, 21% of offices remain without a tenant, a plunge not seen in decades.
For the time being, the momentum experienced by the office real estate market is a reality and an opportunity for swift and decisive economic recovery in Palm Beach County. With an industry characterized by constant fluctuations, however, it is important to remember that trends do not last forever. As remarked by Scherer to Invest:, in real estate, “Good times don’t last and neither do bad times.”