Developers plan more than 1 million square feet of warehouses for the industrial area between Southern Boulevard and Belvedere Road along Florida’s Turnpike, a building boom that reflects a return to normal for Palm Beach County’s commercial real estate market.
Duke Realty plans 822,850 square feet at Belvedere and Jog roads along the turnpike. Palm Beach County developer McCraney Property Co. aims to build 388,000 square feet at its Turnpike Business Center.
FedEx expects to move into a 225,000-square-foot distribution center on Pike Road next year. And a couple miles east of the turnpike on Southern Boulevard, Liberty Property Trust is marketing 218,160 square feet.
“It feels like 2004 all over again,” said Robert Smith, a broker at CBRE who markets Duke Realty’s Turnpike Crossing.
This boom looks unlikely to lead to bust, developers and brokers say, simply because so few warehouses have been built in recent years.
“For far too long, there was little to no activity,” said Steven McCraney, head of McCraney Property Co.
The result? Microscopic vacancy rates for warehouse space in Palm Beach County.
“We’re basically out of space,” said broker Michael Falk.
Falk says the vacancy rate for industrial space is 3 percent. Smith pegs it at 4 percent. Either way, there’s little space to accommodate distribution companies such as FedEx, or the construction-related companies that typically occupy Palm Beach County’s industrial buildings.
The flurry of new development “is much-needed,” Smith said. “I literally have lists of tenants who are looking for space and can’t find it.”
Even so, Duke Realty will take care not to build too quickly. The landlord has begun construction of two buildings at Turnpike Crossing but won’t build more until those warehouses are rented, Smith said.
Industrial tenants typically don’t sign leases until buildings have been built, but McCraney already has landed one tenant for Turnpike Business Center. Adrenalin Rush, an indoor go-kart track planned by a French entrepreneur, took 69,896 square feet.
As for FedEx, which has seen shipping volumes soar amid an explosion in online shopping, it aims to hire 190 workers at the new distribution center. FedEx said business is so brisk that it will keep its two other hubs in Palm Beach County.
The construction projects are in an unincorporated area west of West Palm Beach.
Source: Palm Beach Post
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