Financial difficulties can force many companies from all kinds of business sectors to make tough choices in regards to their balance sheets. Throughout the economic downturn of recent years, this has meant that more companies are comfortable standing pat in their current office buildings, regardless of space concerns, because traditionally it has been a very expensive proposition to relocate a company’s headquarters or a main office hub. When profit begins to shrink, moving into updated facilities is usually the last consideration in the minds of company decision makers.
However, in South Florida, it appears that many companies are beginning to fill up some of the vacant office space available throughout the local area. According to a recent report, in Palm Beach County in particular the office vacancy rate dropped to 19.8 percent last year, which was a decrease from the 21.6 percent vacancy rate in 2012. Not only that, but the rental rate for office space also reportedly increased by $.71 per square foot over the same time period.
While any sign of improvement in the commercial real estate market is always welcome news, the fact remains that this sector of real estate is still lagging far behind the improvements in residential real estate market. The recent report indicated that an office space vacancy rate of 10 percent or less would be closer to the range in which analysts consider the market to be “healthy.”
Nonetheless, there may be more companies beginning to consider a move to occupy some of the office space that is still available. Many of the best locations are already close to maximum capacity, but for those interested in commercial property there are still opportunities to explore.
Source: Sun Sentinel, “Commercial real estate making strides despite office vacancies,” Paul Owers, March 19, 2014