Palm Beach Industrial Is Running as Two Markets. Small Buildings Are 3.4% Vacant While New Ones Sit Near 31%

Palm Beach County’s industrial vacancy rose to 9.1% in the third quarter, but that headline hides two very different markets: buildings under 50,000 square feet were just 3.4% vacant, while product delivered since 2020 sat at 31.1%, according to CBRE figures released October 7. Buildings completed before 2000, about 70% of the county’s inventory, were 3.7% vacant. Anyone pricing a lease or a sale off the county average is likely to get it wrong in one direction or the other.

Where the vacancy came from

About 583,000 square feet delivered in the quarter, most of it speculative space at The District in Boynton Beach. Net absorption was a positive 114,533 square feet, and all of it came from new buildings, which absorbed about 191,000 square feet, led by The Brook Tennis and Pickleball at The District and West Atlantic Business Center’s Building B, which delivered fully leased. Existing buildings moved only 16 basis points.

The rent spread tells the same story. CBRE’s average direct asking rate was $14.51 per square foot overall, but $18.22 for buildings under 50,000 square feet and about $10 for buildings between 250,000 and 500,000 square feet. R&D and flex space was 3.7% vacant and manufacturing 2.8%, against 10.7% for distribution and logistics.

The supply wave is cresting. Construction has fallen to about 265,000 square feet, a five-year low, and more than 80% of it is pre-leased. About 317,000 square feet of signed leases and build-to-suits are scheduled to occupy in the fourth quarter, against roughly 425,000 square feet of listed space that is still occupied but due to come available.

A small-bay sale that fits the pattern

Marcus & Millichap announced on October 7 the $11.4 million sale of Landmark Small-Bay Auto Center at 2348 to 2360 N. Military Trail in West Palm Beach, about $264 per square foot. The 43,125-square-foot property on 4.2 acres, built in 1989, was fully occupied by 12 tenants, about two-thirds of them automotive users, with suites from roughly 1,700 to 7,300 square feet and 54 grade-level bays. Pugliese Creative Ventures bought it from PMD Capital Management, with Douglas Mandel, Zach Levine and Cody Hershey of Marcus & Millichap handling the sale. It is a mixed-use small-bay reference rather than a pure warehouse comparable, and permitted automotive uses, parking and environmental condition all matter when applying it to another property.

What this means for you

If you own a small-bay or older multi-tenant building, you are operating in a tight market. Defend renewals with size-matched comparables, not the 9.1% county figure. If you are a tenant in a small bay, expect limited concessions and plan renewals early. If you need a large, modern building, the newest product offers real leverage: push for free rent, improvement allowances and firm commitments on power, buildout and delivery. If you are an investor, small-bay pricing near $264 per square foot shows how much the market values functional, fully leased multi-tenant space.

AXCESS Commercial works with owners and tenants across Palm Beach County, leasing space, listing properties for sale and managing small-bay and industrial buildings.

Talk to our team about leasing, listing or managing your Palm Beach County property →