With all the talk about the red-hot South Florida residential real estate market our readers would probably expect to see commercial property, like office buildings and retail centers, filling up with tenants. A recent report noted that Palm Beach County alone has nearly 29.6 million square feet in commercial real estate, but anyone who thinks that this type of property may be too hot to handle may want to think again.
The report also noted that only an additional 88,000 square feet of commercial property has been signed up for through new leases or expanded leases this year from the end-of-year figures in 2012 in Palm Beach County. This somewhat meager growth leads to the conclusion that commercial tenants in that county may still be able to call the shots with the upper hand in lease negotiations.
This is good news for buyers and renters for a change, at least on the commercial side of the real estate market in South Florida. Our readers are no doubt thoroughly familiar with previous posts here detailing the one-sided aspect of residential real estate in the local counties, where bidding wars and all cash deals are as common as ever. However, commonsense would probably make our readers think that the continued turnaround on the residential side of the market will eventually have a strong impact on the commercial side of things sooner rather than later.
For the time being though, any business looking to set up shop in Palm Beach County make want to move fast while buyers and renters still have a bit of leverage. The recent report noted the inevitable may indeed be fast approaching: rates on commercial property rose $.28 per square foot through the halfway point of 2013 over 2012 rates. Will those rates only continue to rise?
Source: Sun Sentinel, “Real estate notebook: Tenants still calling the shots,” Paul Owers, Oct. 5, 2013