Q1 2023 Retail Space Report: Palm Beach County, FL
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Palm Beach County, known for its picturesque beaches, crystal-clear waters, and temperate climate, saw steady economic performance overall throughout Q1 2023 thanks to greater labor force participation: Between 2017 and 2021, the civilian labor force of those over 16 was 59.8%.
In Q1 2023, Palm Beach County’s retail space market saw increased inventory, new supply, positive net absorption, and rising rents.
General Area Overview & Demographics
Palm Beach County is a large and diverse region in the United States of the southeastern part of Florida. The county covers an area of 2,383 square miles and is home to a population of over 1.5 million residents, making it one of the most populous counties in Florida.
Geopolitical, Geographic, and Demographic Makeup of Palm Beach County, FL
The county seat of Palm Beach County is West Palm Beach, the largest city in the county. Other major cities in the county include Boca Raton, Boynton Beach, Delray Beach, Jupiter, Palm Beach Gardens, and Wellington. The county has several smaller towns and communities, each with unique charm and character.
Palm Beach County is known for its beautiful beaches, sunny weather, and luxurious lifestyle. The county is home to a thriving tourism industry, with millions of visitors visiting the region each year to enjoy its warm climate, pristine beaches, and world-class attractions.
Demographically, it is a diverse region with a mix of different ethnicities and cultures. According to the latest census data, the county is home to a majority White population (about 62%), followed by Black or African American (about 19%), Hispanic or Latino (about 21%), and other ethnic groups (about 4%). The county’s population is also relatively older, with a median age of 45, compared to the national median age of 38.
In terms of education, it is home to several highly regarded universities, including Florida Atlantic University, Palm Beach Atlantic University, and Lynn University. The county also has a robust public school system, with over 180 elementary, middle, and high schools serving students from kindergarten through 12th grade.
Summary of Palm Beach County Retail Space Performance in Q1 2023
Total retail space vacancies remained unchanged quarter-over-quarter at 3.5% for Palm Beach County’s retail space market, the lowest vacancy rate seen in the county since 2020.
In the county’s CBD, vacancies were lowest in the West Palm Beach submarket at 0.6% and highest in the Boca Raton East submarket at 6.4%.
In the suburban area, Boca Raton North saw the lowest retail vacancies at 0.5%, while Royal Palm Beach/Wellington sawthe highest at 5.7%.
Retail Absorption
Retail net absorption in Palm Beach County, FL was positive in Q1 2023, with over 135,000 square feet absorbed. This marks a quarterly increase from Q4 2022’s 68,000 square feet.
In the CBD, Palm Beach and West Palm Beach were the only submarkets with positive absorption, 3,000 and 5,750, respectively.
While the majority of the suburban markets also went negative, significant gains in West Palm Beach (88,000), Jupiter (70,000), and Palm Beach County Outlying (51,500) led to positive overall absorption for Q1 2923.
What are retail space rents like in Palm Beach County?
Average rents for Palm Beach County retail space were $30.41 per square foot in Q1 2023, a quarterly increase from Q4 2022’s $29.10.
Rents were highest in the Palm Beach submarket, averaging around $77.23 per square foot; the next highest was West Palm Beach in the CBD at $48.90.
Palm Springs/Lake Worth saw the lowest average retail rents at just $20.76 per square foot.
Purchase & Leasing Activity
The largest sale for Palm Beach County retail space was Boynton Trail Shopping Center’s purchase of Shoppes at the Village of Golf, which transacted at $41 million. The sale was for over 78,000 square feet of retail space at $524 per square foot.
Sky Zone signed the largest new retail lease in Q1 2023 for 27,000 square feet in Catalina Centre.
Other Notable Retail Space Deals in Palm Beach County in Q1 2023
There were several other notable deals for Palm Beach County retail space in Q1 2023:
- Soloviev Group purchased Leviathan Buildings for $32 million.
- Albert Capone purchased Walgreens for $6.2 million.
- True Treasures Consigned Furniture & Home Décor leased 12,000 square feet at PGA Professional and Design Center.
- TRX leased 11,700 square feet at Delray Pointe.
These are select examples among other activity.
New Retail Space Development Activity in Palm Beach County in Q1 2023
Palm Beach County saw over 136,000 square feet of new retail product in Q1 2023, with the Jupiter submarket accounting for nearly half of that at 61,600 square feet of deliveries.
The rest of the new developments was for the Lantana, Palm Springs/Lake Worth, and West Palm Beach submarkets.
Q1 2023 saw nearly 546,000 square feet of new retail space in the county’s construction pipeline.
Market Forecast for Palm Beach County’s Retail Space Market
In 2022, the number of shoppers who prefer to buy online increased by 37%, forcing retailers to explore alternative strategies, such as creating in-store experiences that integrate digital fulfillment to attract more customers.
The primary players in this trend are large-scale retailers, grocery stores, and department stores.
This trend will likely persist throughout 2023 and beyond as retailers strive to remain cost-effective and customer-focused amidst economic uncertainty. As a result, landlords are modifying big-box floor plans into smaller spaces to meet growing demand.
Takeaways for Retail Space Investors
Given the strong economic performance that Palm Beach County saw in Q1 2023 and South Florida’s continued population and tourism growth, Palm Beach County’s retail space market holds promise.
Do your research, stay diligent, and happy investing.
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