The CoStar
Office Report
T H I R D
Q U A R T E R
2 0 1 3
Palm Beach County
Office Market
THIRD QUARTER 2013 – PALM BEACH COUNTY
Palm Beach County Office Market
Table of Contents
Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A
Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B
Terms & Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C
Market Highlights & Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
CoStar Markets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Inventory & Development Analysis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Inventory & Development Analysis
Select Top Under Construction Properties
Select Top Deliveries
Figures at a Glance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Figures at a Glance by Class & Market
Figures at a Glance Grouped by CBD vs Suburban
Historical Figures at a Glance
Leasing Activity Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Select Top Lease Transactions
Sales Activity Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Sales Activity Analysis
Select Top Sales Transactions
Analysis of Individual CoStar Submarket Clusters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Boca Raton Market
Boynton/Lantana Market
Delray Beach Market
Jupiter Market
North Palm Beach Market
Palm Beach Market
Palm Springs/Lake Worth Market
Royal Palm Bch/Wellington Market
West Palm Beach Market
©2013 COSTAR GROUP, INC.
THE COSTAR OFFICE REPORT
A
PALM BEACH COUNTY – THIRD QUARTER 2013
Palm Beach County Office Market
Methodology
The CoStar Office Report, unless specifically stated otherwise, calculates office statistics using CoStar
Group’s entire database of existing and under construction office buildings in each metropolitan area.
Included are office, office condominium, office loft, office medical, all classes and all sizes, and both
multi-tenant and single-tenant buildings, including owner-occupied buildings. CoStar Group's national
database includes approximately 80.7 billion square feet of coverage in 3.5 million properties. All rental
rates reported in the CoStar Office Report have been converted to a Full Service equivalent rental rate.
For information on subscribing to CoStar’s other products and services, please contact us at
1-877-7COSTAR, or visit our web site at www.costar.com
© Copyright 2013 CoStar Group, Inc. All Rights Reserved. Although CoStar makes efforts to ensure the accuracy and reliability of the
information contained herein, CoStar makes no guarantee, representation or warranty regarding the quality, accuracy, timeliness or
completeness of the information. The publication is provided ‘as is’ and CoStar expressly disclaims any guarantees, representations or
warranties of any kind, including those of MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
CoStar Group, Inc.
1331 L ST NW • Washington, DC 20005• (800) 204-5960 • www.costar.com • NASDAQ: CSGP
B
THE COSTAR OFFICE REPORT
©2013 COSTAR GROUP, INC.
THIRD QUARTER 2013 – PALM BEACH COUNTY
Palm Beach County Office Market
Terms & Definitions
Availability Rate: The ratio of available space to total rentable
space, calculated by dividing the total available square feet by the
total rentable square feet.
Deliveries: Buildings that complete construction during a specified
period of time. In order for space to be considered delivered, a
certificate of occupancy must have been issued for the property.
Available Space: The total amount of space that is currently
being marketed as available for lease in a given time period. It
includes any space that is available, regardless of whether the
space is vacant, occupied, available for sublease, or available at
a future date.
Delivery Date: The date a building completes construction and
receives a certificate of occupancy.
Build-to-Suit: A term describing a particular property, developed
specifically for a certain tenant to occupy, with structural features,
systems, or improvement work designed specifically for the needs
of that tenant. A build-to-suit can be leased or owned by the tenant. In a leased build-to-suit, a tenant will usually have a long
term lease on the space.
Direct Space: Space that is being offered for lease directly from
the landlord or owner of a building, as opposed to space being
offered in a building by another tenant (or broker of a tenant)
trying to sublet a space that has already been leased.
Buyer: The individual, group, company, or entity that has purchased a commercial real estate asset.
Cap Rate: Short for capitalization rate. The Cap Rate is a calculation that reflects the relationship between one year’s net operating
income and the current market value of a particular property.
The Cap Rate is calculated by dividing the annual net operating
income by the sales price (or asking sales price).
CBD: Abbreviation for Central Business District. (See also:
Central Business District)
Central Business District: The designations of Central Business
District (CBD) and Suburban refer to a particular geographic area
within a metropolitan statistical area (MSA) describing the level
of real estate development found there. The CBD is characterized
by a high density, well organized core within the largest city of a
given MSA.
Class A: A classification used to describe buildings that generally
qualify as extremely desirable investment-grade properties and
command the highest rents or sale prices compared to other
buildings in the same market. Such buildings are well located
and provide efficient tenant layouts as well as high quality, and in
some buildings, one-of-a-kind floor plans. They can be an architectural or historical landmark designed by prominent architects.
These buildings contain a modern mechanical system, and have
above-average maintenance and management as well as the best
quality materials and workmanship in their trim and interior fittings. They are generally the most attractive and eagerly sought
by investors willing to pay a premium for quality.
Class B: A classification used to describe buildings that generally
qualify as a more speculative investment, and as such, command
lower rents or sale prices compared to Class A properties. Such
buildings offer utilitarian space without special attractions, and
have ordinary design, if new or fairly new; good to excellent
design if an older non-landmark building. These buildings typically have average to good maintenance, management and tenants.
They are less appealing to tenants than Class A properties, and
may be deficient in a number of respects including floor plans,
condition and facilities. They lack prestige and must depend
chiefly on a lower price to attract tenants and investors.
Class C: A classification used to describe buildings that generally qualify as no-frills, older buildings that offer basic space and
command lower rents or sale prices compared to other buildings
in the same market. Such buildings typically have below-average
maintenance and management, and could have mixed or low
tenant prestige, inferior elevators, and/or mechanical/electrical
systems. These buildings lack prestige and must depend chiefly
on a lower price to attract tenants and investors.
Construction Starts: Buildings that began construction during a
specific period of time. (See also: Deliveries)
Contiguous Blocks of Space: Space within a building that is, or is
able to be joined together into a single contiguous space.
©2013 COSTAR GROUP, INC.
Developer: The company, entity or individual that transforms raw
land to improved property by use of labor, capital and entrepreneurial efforts.
Existing Inventory: The square footage of buildings that have
received a certificate of occupancy and are able to be occupied
by tenants. It does not include space in buildings that are either
planned, under construction or under renovation.
Flex Building: A type of building designed to be versatile, which
may be used in combination with office (corporate headquarters),
research and development, quasi-retail sales, and including but
not limited to industrial, warehouse, and distribution uses. A typical flex building will be one or two stories with at least half of the
rentable area being used as office space, have ceiling heights of 16
feet or less, and have some type of drive-in door, even though the
door may be glassed in or sealed off.
Full Service Rental Rate: Rental rates that include all operating
expenses such as utilities, electricity, janitorial services, taxes and
insurance.
Gross Absorption: The total change in occupied space over a
given period of time, counting space that is occupied but not
space that is vacated by tenants. Gross absorption differs from
leasing Activity, which is the sum of all space leased over a certain
period of time. Unless otherwise noted Gross Absorption includes
direct and sublease space.
Growth in Inventory: The change in size of the existing square
footage in a given area over a given period of time, generally due
to the construction of new buildings.
Industrial Building: A type of building adapted for such uses as
the assemblage, processing, and/or manufacturing of products
from raw materials or fabricated parts. Additional uses include
warehousing, distribution, and maintenance facilities. The primary purpose of the space is for storing, producing, assembling,
or distributing product.
Landlord Rep: (Landlord Representative) In a typical lease transaction between an owner/landlord and tenant, the broker that
represents the interests of the owner/landlord is referred to as the
Landlord Rep.
Leased Space: All the space that has a financial lease obligation.
It includes all leased space, regardless of whether the space is
currently occupied by a tenant. Leased space also includes space
being offered for sublease.
Leasing Activity: The volume of square footage that is committed to and signed under a lease obligation for a specific building
or market in a given period of time. It includes direct leases,
subleases and renewals of existing leases. It also includes any
pre-leasing activity in planned, under construction, or under
renovation buildings.
Market: Geographic boundaries that serve to delineate core areas
that are competitive with each other and constitute a generally
accepted primary competitive set of areas. Markets are buildingtype specific, and are non-overlapping contiguous geographic
designations having a cumulative sum that matches the boundaries of the entire Region (See also: Region). Markets can be further
subdivided into Submarkets. (See also: Submarkets)
THE COSTAR OFFICE REPORT
C
PALM BEACH COUNTY – THIRD QUARTER 2013
Palm Beach County Office Market
Multi-Tenant: Buildings that house more than one tenant at a
given time. Usually, multi-tenant buildings were designed and
built to accommodate many different floor plans and designs for
different tenant needs. (See also: Tenancy).
Net Absorption: The net change in occupied space over a given
period of time. Unless otherwise noted Net Absorption includes
direct and sublease space.
Net Rental Rate: A rental rate that excludes certain expenses that
a tenant could incur in occupying office space. Such expenses
are expected to be paid directly by the tenant and may include
janitorial costs, electricity, utilities, taxes, insurance and other
related costs.
New Space: Sometimes called first generation space, refers to
space that has never been occupied and/or leased by a tenant.
Occupied Space: Space that is physically occupied by a tenant.
It does not include leased space that is not currently occupied
by a tenant.
Office Building: A type of commercial building used exclusively
or primarily for office use (business), as opposed to manufacturing, warehousing, or other uses. Office buildings may sometimes
have other associated uses within part of the building, i.e., retail
sales, financial, or restaurant, usually on the ground floor.
Owner: The company, entity, or individual that holds title on a
given building or property.
Planned/Proposed: The status of a building that has been
announced for future development but not yet started
construction.
Preleased Space: The amount of space in a building that has been
leased prior to its construction completion date, or certificate of
occupancy date.
Price/SF: Calculated by dividing the price of a building (either
sales price or asking sales price) by the Rentable Building Area
(RBA).
Property Manager: The company and/or person responsible for
the day-to-day operations of a building, such as cleaning, trash
removal, etc. The property manager also makes sure that the various systems within the building, such as the elevators, HVAC, and
electrical systems, are functioning properly.
Quoted Rental Rate: The asking rate per square foot for a particular building or unit of space by a broker or property owner.
Quoted rental rates may differ from the actual rates paid by
tenants following the negotiation of all terms and conditions in
a specific lease.
RBA: Abbreviation for Rentable Building Area. (See also:
Rentable Building Area)
Region: Core areas containing a large population nucleus, that
together with adjacent communities have a high degree of economic and social integration. Regions are further divided into
market areas, called Markets. (See also: Markets)
Relet Space: Sometimes called second generation or direct space,
refers to existing space that has previously been occupied by
another tenant.
Rentable Building Area: (RBA) The total square footage of a
building that can be occupied by, or assigned to a tenant for the
purpose of determining a tenant’s rental obligation. Generally
RBA includes a percentage of common areas including all hallways, main lobbies, bathrooms, and telephone closets.
Rental Rates: The annual costs of occupancy for a particular
space quoted on a per square foot basis.
Sales Price: The total dollar amount paid for a particular property
at a particular point in time.
Sales Volume: The sum of sales prices for a given group of buildings in a given time period.
D
Seller: The individual, group, company, or entity that sells a particular commercial real estate asset.
SF: Abbreviation for Square Feet.
Single-Tenant: Buildings that are occupied, or intended to be
occupied by a single tenant. (See also: Build-to-suit and Tenancy)
Sublease Space: Space that has been leased by a tenant and is
being offered for lease back to the market by the tenant with
the lease obligation. Sublease space is sometimes referred to as
sublet space.
Submarkets: Specific geographic boundaries that serve to delineate a core group of buildings that are competitive with each
other and constitute a generally accepted primary competitive
set, or peer group. Submarkets are building type specific (office,
industrial, retail, etc.), with distinct boundaries dependent on
different factors relevant to each building type. Submarkets are
non-overlapping, contiguous geographic designations having a
cumulative sum that matches the boundaries of the Market they
are located within (See also: Market).
Suburban: The Suburban and Central Business District (CBD)
designations refer to a particular geographic area within a metropolitan statistical area (MSA). Suburban is defined as including all
office inventory not located in the CBD. (See also: CBD)
Tenancy: A term used to indicate whether or not a building is
occupied by multiple tenants (See also: Multi-tenant) or a single
tenant. (See also: Single-tenant)
Tenant Rep: Tenant Rep stands for Tenant Representative. In a
typical lease transaction between an owner/landlord and tenant,
the broker that represents the interests of the tenant is referred to
as a Tenant Rep.
Time On Market: A measure of how long a currently available
space has been marketed for lease, regardless of whether it is
vacant or occupied.
Under Construction: The status of a building that is in the process
of being developed, assembled, built or constructed. A building is
considered to be under construction after it has begun construction and until it receives a certificate of occupancy.
Vacancy Rate: A measurement expressed as a percentage of the
total amount of physically vacant space divided by the total
amount of existing inventory. Under construction space generally
is not included in vacancy calculations.
Vacant Space: Space that is not currently occupied by a tenant,
regardless of any lease obligation that may be on the space.
Vacant space could be space that is either available or not available. For example, sublease space that is currently being paid for
by a tenant but not occupied by that tenant, would be considered
vacant space. Likewise, space that has been leased but not yet
occupied because of finish work being done, would also be considered vacant space.
Weighted Average Rental Rate: Rental rates that are calculated by
factoring in, or weighting, the square footage associated with each
particular rental rate. This has the effect of causing rental rates
on larger spaces to affect the average more than that of smaller
spaces. The weighted average rental rate is calculated by taking
the ratio of the square footage associated with the rental rate on
each individual available space to the square footage associated
with rental rates on all available spaces, multiplying the rental rate
by that ratio, and then adding together all the resulting numbers.
Unless specifically specified otherwise, rental rate averages include
both Direct and Sublet available spaces.
Year Built: The year in which a building completed construction
and was issued a certificate of occupancy.
YTD: Abbreviation for Year-to-Date. Describes statistics that are
cumulative from the beginning of a calendar year through whatever time period is being studied.
THE COSTAR OFFICE REPORT
©2013 COSTAR GROUP, INC.
THIRD QUARTER 2013 – PALM BEACH COUNTY
Palm Beach County Office Market
OVERVIEW
Palm Beach County’s Vacancy Falls to 15.6%
Net Absorption Positive 153,942 SF in the Quarter
T
he Palm Beach County Office market ended the third
quarter 2013 with a vacancy rate of 15.6%. The
vacancy rate was down over the previous quarter, with
net absorption totaling positive 153,942 square feet in the third
quarter. Vacant sublease space decreased in the quarter, ending
the quarter at 161,071 square feet. Rental rates ended the third
quarter at $25.58, an increase over the previous quarter. There
was 194,120 square feet still under construction at the end of the
quarter.
Absorption
Net absorption for the overall Palm Beach County office
market was positive 153,942 square feet in the third quarter
2013. That compares to positive 87,083 square feet in the second
quarter 2013, negative (10,172) square feet in the first quarter
2013, and positive 414,225 square feet in the fourth quarter
2012.
Tenants moving out of large blocks of space in 2013
include: Ob/Gyn Specialists of the Palm Beaches, P.A. moving
out of 28,604 square feet at Flagler Waterview; S & H Solutions
moving out of 20,351 square feet at 1625 S Congress Ave; and
Kubicki Draper moving out of 19,074 square feet at 1645Palm
Beach Lakes Blvd.
Tenants moving into large blocks of space in 2013 include:
Aldridge Connors LLP moving into 39,788 square feet at 1615 S
Congress; BMI Elite moving into 20,150 square feet at The Siena
at Broken Sound; and TherapeuticsMD moving into 17,686
square feet at 6800 Broken Sound Pky NW.
The Class-A office market recorded net absorption of positive 107,771 square feet in the third quarter 2013, compared to
Vacancy Rates by Class
negative (246) square feet in the second quarter 2013, negative
(766) in the first quarter 2013, and positive 139,220 in the fourth
quarter 2012.
The Class-B office market recorded net absorption of positive 93,368 square feet in the third quarter 2013, compared to
positive 97,991 square feet in the second quarter 2013, negative
(5,283) in the first quarter 2013, and positive 215,322 in the
fourth quarter 2012.
The Class-C office market recorded net absorption of negative (47,197) square feet in the third quarter 2013 compared to
negative (10,662) square feet in the second quarter 2013, negative
(4,123) in the first quarter 2013, and positive 59,683 in the fourth
quarter 2012.
Net absorption for Palm Beach County’s central business
district was positive 50,446 square feet in the third quarter 2013.
That compares to negative (24,122) square feet in the second
quarter 2013, negative (30,571) in the first quarter 2013, and
positive 99,576 in the fourth quarter 2012.
Net absorption for the suburban markets was positive
103,496 square feet in the third quarter 2013. That compares
to positive 111,205 square feet in second quarter 2013, positive
20,399 in the first quarter 2013, and positive 314,649 in the
fourth quarter 2012.
Vacancy
The office vacancy rate in the Palm Beach County market
area decreased to 15.6% at the end of the third quarter 2013.
The vacancy rate was 15.8% at the end of the second quarter
2013, 16.0% at the end of the first quarter 2013, and 15.9% at
the end of the fourth quarter 2012.
1999-2013
A
B
C
Total Market
25%
Vacancy Rate
20%
15%
10%
5%
0%
1999 2000 2000 2001 2001 2002 2002 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013
3q
1q
3q
1q
3q
1q
3q
1q
3q
1q
3q
1q
3q
1q
3q
1q
3q
1q
3q
1q
3q
1q
3q
1q
3q
1q
3q
1q
3q
Source: CoStar Property®
Absorption & Deliveries
©2013 COSTAR GROUP, INC.
Past 9 Quarters
U.S. Vacancy Comparison
THE COSTAR OFFICE REPORT
Past 9 Quarters
1
PALM BEACH COUNTY – THIRD QUARTER 2013
Palm Beach County Office Market
OVERVIEW
B
Class-A projects reported a vacancy rate of 17.7% at the end
of the third quarter 2013, 18.4% at the end of the second quarter
2013, 18.4% at the end of the first quarter 2013, and 18.4% at
the end of the fourth quarter 2012.
Class-B projects reported a vacancy rate of 17.6% at the end
of the third quarter 2013, 17.8% at the end of the second quarter
2013, 18.1% at the end of the first quarter 2013, and 18.0% at
the end of the fourth quarter 2012.
Class-C projects reported a vacancy rate of 8.5% at the
end of the third quarter 2013, 8.1% at the end of second quarter
2013, 8.0% at the end of the first quarter 2013, and 7.9% at the
end of the fourth quarter 2012.
The overall vacancy rate in Palm Beach County’s central
business district at the end of the third quarter 2013 decreased
to 14.8%. The vacancy rate was 15.1% at the end of the second
quarter 2013, 14.9% at the end of the first quarter 2013, and
14.7% at the end of the fourth quarter 2012.
The vacancy rate in the suburban markets decreased to
15.9%
in the third quarter 2013. The vacancy rate was 16.1% at
C
Total Market
the end of the second quarter 2013, 16.4% at the end of the first
quarter 2013, and 16.3% at the end of the fourth quarter 2012.
Largest Lease Signings
The largest lease signings occurring in 2013 included: the
72,047-square-foot lease signed by Tyco Integrated Security at
4700 T Rex Ave in the Boca Raton market; the 40,000-squarefoot deal signed by Akerman Senterfitt LLC at Phillips Point in
the West Palm Beach market; and the 39,788-square-foot lease
signed by Aldridge Connors LLP at 1615 S Congress in the Delray
Beach market.
U.S. Vacancy Comparison
Past 9 Quarters
Palm Beach County
United States
20.0%
18.0%
16.0%
Vacancy Rate
2006
1q
Sublease Vacancy
The amount of vacant sublease space in the Palm Beach
2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011 2012 2012 2013 2013
3q County
1q
3q market
1q
3q decreased
1q
3q
1q
3q
1q square
3q
1q feet
3q by
1q the
3q end of
to 161,071
the third quarter 2013, from 183,705 square feet at the end of
the second quarter 2013. There was 140,692 square feet vacant
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
2011
3q
2011
4q
2012
1q
2012
2q
2012
3q
2012
4q
2013
1q
2013
2q
2013
3q
at the end of the first quarter 2013 and 125,660 square feet at the
end of the fourth quarter 2012.
Palm Beach County’s Class-A projects reported vacant
sublease space of 58,181 square feet at the end of third quarter
2013, down from the 80,395 square feet reported at the end of
the second quarter 2013. There were 41,899 square feet of sublease space vacant at the end of the first quarter 2013, and 34,041
square feet at the end of the fourth quarter 2012.
Class-B projects reported vacant sublease space of 76,544
square feet at the end of the third quarter 2013, down from the
84,226 square feet reported at the end of the second quarter
2013. At the end of the first quarter 2013 there were 80,389
square feet, and at the end of the fourth quarter 2012 there were
83,097 square feet vacant.
Class-C projects reported increased vacant sublease space
from the second quarter 2013 to the third quarter 2013. Sublease
vacancy went from 19,084 square feet to 26,346 square feet during that time. There was 18,404 square feet at the end of the
first quarter 2013, and 8,522 square feet at the end of the fourth
quarter 2012.
Sublease vacancy in Palm Beach County’s central business
district stood at 51,869 square feet at the end of the third quarter
2013. It was 38,569 square feet at the end of the second quarter
2013, 32,437 square feet at the end of the first quarter 2013, and
32,437 square feet at the end of the fourth quarter 2012.
Sublease vacancy in the suburban markets ended the third
quarter 2013 at 109,202 square feet. At the end of the second
quarter 2013 sublease vacancy was 145,136 square feet, was
108,255 square feet at the end of the first quarter 2013, and was
93,223 square feet at the end of the fourth quarter 2012.
Rental Rates
The average quoted asking rental rate for available office
space, all classes, was $25.58 per square foot per year at the end
of the third quarter 2013 in the Palm Beach County market area.
This represented a 0.1% increase in quoted rental rates from the
end of the second quarter 2013, when rents were reported at
$25.55 per square foot.
The average quoted rate within the Class-A sector was
$32.17 at the end of the third quarter 2013, while Class-B rates
stood at $23.50, and Class-C rates at $20.26. At the end of the
second quarter 2013, Class-A rates were $32.19 per square foot,
Class-B rates were $23.38, and Class-C rates were $19.77.
The average quoted asking rental rate in Palm Beach County’s
CBD was $27.48 at the end of the third quarter 2013, and $24.99
in the suburban markets. In the second quarter 2013, quoted rates
were $27.40 in the CBD and $24.97 in the suburbs.
Deliveries and Construction
During the third quarter 2013, no new space was completed
in the Palm Beach County market area. This compares to no
new space completed in the second quarter 2013, three buildings
Source: CoStar Property•
2
THE COSTAR OFFICE REPORT
©2013 COSTAR GROUP, INC.
5%
THIRD QUARTER 2013 – PALM BEACH COUNTY
0%
1999 2000 2000 2001 2001 2002 2002 2003 2003 2004 2004 2005 2005 2006
3q
1q
3q
1q
3q
1q
3q
1q
3q
1q
3q
1q
3q
1q
Palm Beach County Office Market
OVERVIEW
Inventory
Total office inventory in the Palm Beach County market
area amounted to 54,297,318 square feet in 2,746 buildings as
of the end of the third quarter 2013. The Class-A office sector
consisted of 13,195,439 square feet in 119 projects. There were
1,076 Class-B buildings totaling 29,275,823 square feet, and the
Class-C sector consisted of 11,826,056 square feet in 1,551 buildings. Within the Office market there were 101 owner-occupied
buildings accounting for 2,600,202 square feet of office space.
Sales Activity
Tallying office building sales of 15,000 square feet or larger,
Palm Beach County office sales figures fell during the second
quarter 2013 in terms of dollar volume compared to the first
quarter of 2013.
In the second quarter, two office transactions closed with a
total volume of $19,450,000. The two buildings totaled 171,565
square feet and the average price per square foot equated to
$113.37 per square foot. That compares to six transactions totaling $26,411,178 in the first quarter 2013. The total square footage in the first quarter was 200,962 square feet for an average
©2013 COSTAR GROUP, INC.
Absorption & Deliveries
Past 9 Quarters
Net Absorption
Deliveries
0.5
0.41
0.4
0.3
Millions SF
totaling 42,200 square feet completed in the first quarter 2013,
and 27,490 square feet in one building completed in the fourth
quarter 2012.
There were 194,120 square feet of office space under construction at the end of the third quarter 2013.
Some of the notable 2013 deliveries include: University
Centre II, a 30,000-square-foot facility that delivered in first
quarter 2013 and is now 100% occupied, and 1600 N Dixie
Hwy, a 6,200-square-foot building that delivered in first quarter
2013 and is now 0% occupied.
The largest projects underway at the end of third quarter
2013 were Harbourside Place - Building #5, a 38,430-squarefoot building with 7% of its space pre-leased, and Hagen Ranch
Medical Center, a 36,000-square-foot facility that is 30% preleased.
Source: CoStar Property®
0.28
0.2
0.15
0.15
0.11
0.1
0.00
0.01
0.00
0.10
0.08
0.09
0.03
0.00
0.04
0.00
0.00
2013
2q
2013
3q
0.0
(0.01)
(0.1)
(0.07)
2011
3q
2011
4q
2012
1q
2012
2q
2012
3q
2012
4q
2013
1q
Source: CoStar Property•
price per square foot of $131.42.
Total office building sales activity in 2013 was down compared to 2012. In the first six months of 2013, the market saw
eight office sales transactions with a total volume of $45,861,178.
The price per square foot averaged $123.11. In the same first six
months of 2012, the market posted 15 transactions with a total
volume of $78,194,852. The price per square foot averaged
$87.58.
Cap rates have been higher in 2013, averaging 8.62% compared to the same period in 2012 when they averaged 6.21%.
One of the largest transactions that has occurred within the
last four quarters in the Palm Beach County market is the sale of
Bethesda Health City in Boynton Beach. This 133,348-squarefoot office building sold for $49,500,000, or $371.21 per square
foot. The property sold on 9/13/2013.
Reports compiled by: Jeff Miles & John Kneisly, CoStar Research Managers
and the South Florida Research Staff.
THE COSTAR OFFICE REPORT
3
PALM BEACH COUNTY – THIRD QUARTER 2013
Palm Beach County Office Market
MARKETS
CoStar Submarkets
In analyzing metropolitan areas, CoStar has developed geographic designations to help group properties together, called Markets,
Submarket Clusters and Submarkets. Markets are the equivalent of metropolitan areas, or areas containing a large population
nucleus, that together with adjacent communities have a high degree of economic and social integration. Markets are then divided
into Submarket Clusters, which are core areas within a metropolitan area that are known to be competitive with each other in terms
of attracting and keeping tenants. Markets are then further subdivided into smaller units called Submarkets, which serve to delineate
a core group of buildings that are competitive with each other and constitute a generally accepted competitive set, or peer group.
Submarket Clusters
Boca Raton
Boynton/Lantana
Delray Beach
Jupiter
North Palm Beach*
Palm Beach*
Palm Springs/Lake Worth
Royal Palm Bch/Wellington
West Palm Beach**
* Submarkets comprising the CBD. For statistics reference the CBD vs Suburban Figures at a Glance Page.
4
THE COSTAR OFFICE REPORT
©2013 COSTAR GROUP, INC.
THIRD QUARTER 2013 – PALM BEACH COUNTY
Palm Beach County Office Market
INVENTORY & DEVELOPMENT
Historical Deliveries
Deliveries
4.0
3.5
3.0
Millions of SF
Average Delivered SF
3.7
3.5
2.5
1982 - 2013
2.6
2.5
2.0
1.7
1.8
2.6
1.6
1.5
1.7
1.4 1.5
1.5
1.4 1.4
1.2
1.2
0.8 0.8 0.8
1.0
0.6
0.5
1.0
0.5
0.2
1.0
0.7
0.3 0.3 0.3
0.2 0.2 0.1 0.2
0.0
1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: CoStar Property®
* Future deliveries based on current under construction buildings.
Construction Activity
Markets Ranked by Under Construction Square Footage
Under Construction Inventory
Total RBA
# Bldgs
Market
Average Bldg Size
Preleased SF
Preleased %
All Existing
U/C
Jupiter
4
101,795
14,543
14.3%
15,907
25,449
Boynton/Lantana
1
36,000
10,800
30.0%
12,484
36,000
West Palm Beach
1
28,015
28,015
100.0%
16,360
28,015
Palm Beach
1
22,000
0
0.0%
19,410
22,000
Delray Beach
1
6,310
3,281
52.0%
11,182
6,310
North Palm Beach
0
0
0
0.0%
22,076
0
Boca Raton
0
0
0
0.0%
37,609
0
Palm Springs/Lake Worth
0
0
0
0.0%
8,873
0
Royal Palm Bch/Wellington
0
0
0
0.0%
21,602
0
Totals
8
194,120
56,639
19,773
24,265
29.2%
Source: CoStar Property®
Recent Deliveries
Future Deliveries
Leased & Un-Leased SF in Deliveries Since 2009
Preleased & Un-Leased SF in Properties Scheduled to Deliver
Preleased
120
1.0
100
0.8
80
Thousands of SF
Millions of SF
Un-Leased
0.6
0.4
0.2
Un-Leased
T
Leased
1.2
60
40
20
0.0
0
2009
Source: CoStar Property®
©2013 COSTAR GROUP, INC.
2010
2011
2012
2013
2013 4q
2014 2q
Source: CoStar Property®
THE COSTAR OFFICE REPORT
5
PALM BEACH COUNTY – THIRD QUARTER 2013
Palm Beach County Office Market
INVENTORY & DEVELOPMENT
Historical Construction Starts & Deliveries
Square Footage Per Quarter Starting and Completing Construction
Construction Starts
0.2
0.17
0.14
0.2
Millions of SF
Deliveries
0.09
0.1
0.08
0.06
0.10
0.09
0.07
0.07
0.06
0.04
0.1
0.01
0.000.00
0.00
0.01
0.00
0.00
0.010.01
0.03
0.02
0.01
0.00
0.00
0.01
0.000.00
0.00
0.0
(0.01)
(0.1)
2010 1q
2010 2q
2010 3q
2010 4q
2011 1q
2011 2q
2011 3q
2011 4q
2012 1q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2013 3q
Source: CoStar Property®
Recent Deliveries by Project Size
Building Size
# Bldgs
RBA
Breakdown of Year-to-Date Development Based on RBA of Project
SF Leased
% Leased
Avg Rate
Single-Tenant
Multi-Tenant
< 50,000 SF
5
51,032
42,582
83.4%
$28.13
38,832
12,200
50,000 SF - 99,999 SF
0
0
0
0.0%
$0.00
0
0
100,000 SF - 249,999 SF
0
0
0
0.0%
$0.00
0
0
250,000 SF - 499,999 SF
0
0
0
0.0%
$0.00
0
0
>= 500,000 SF
0
0
0
0.0%
$0.00
0
0
Source: CoStar Property®
Recent Development by Tenancy
Existing Inventory Comparison
Based on RBA Developed for Single & Multi Tenant Use
Based on Total RBA
2013 Deliveries
71%
Currently Under Construction
By Class
0%
22%
Source: CoStar Property®
6
Single
13%
24%
29%
54%
100%
Multi
By Space Type
Multi
Class A
Single
87%
Class B
Class C
Multi
Single
Source: CoStar Property®
THE COSTAR OFFICE REPORT
©2013 COSTAR GROUP, INC.
THIRD QUARTER 2013 – PALM BEACH COUNTY
Palm Beach County Office Market
INVENTORY & DEVELOPMENT
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©2013 COSTAR GROUP, INC.
THE COSTAR OFFICE REPORT
7
PALM BEACH COUNTY – THIRD QUARTER 2013
Palm Beach County Office Market
FIGURES AT A GLANCE
Class A Market Statistics
Third Quarter 2013
Existing Inventory
Market
Boca Raton
Boynton/Lantana
Delray Beach
Jupiter
North Palm Beach
Palm Beach
Palm Springs/Lake Worth
Royal Palm Bch/Wellington
West Palm Beach
Totals
# Blds
59
3
1
6
20
6
1
2
21
119
Vacancy
YTD Net
YTD
Under
Quoted
Deliveries
0
0
0
0
0
0
0
0
0
Const SF
0
0
0
69,690
0
0
0
0
0
Rates
$30.86
$22.11
$33.27
$42.57
$28.96
$46.58
$28.07
$23.00
$35.94
Total RBA
6,891,004
262,204
30,845
465,798
1,450,813
517,014
50,577
88,000
3,439,184
Direct SF
1,218,198
76,847
0
0
274,211
40,296
26,000
7,245
631,267
Total SF
1,236,255
76,847
0
0
274,510
40,296
26,000
7,245
671,092
Vac %
17.9%
29.3%
0.0%
0.0%
18.9%
7.8%
51.4%
8.2%
19.5%
Absorption
51,585
13,801
1,344
0
20,307
6,493
24,577
0
(11,348)
13,195,439
2,274,064
2,332,245
17.7%
106,759
0
69,690
$32.17
Source: CoStar Property®
Class B Market Statistics
Third Quarter 2013
Existing Inventory
Market
Boca Raton
Boynton/Lantana
Delray Beach
Jupiter
North Palm Beach
Palm Beach
Palm Springs/Lake Worth
Royal Palm Bch/Wellington
West Palm Beach
# Blds
Totals
1,076
224
68
111
108
172
89
32
45
227
Total RBA
8,584,138
1,550,900
2,555,960
2,131,911
5,479,648
1,892,388
559,503
1,128,250
5,393,125
29,275,823
Vacancy
Direct SF
Total SF
1,655,785
258,051
904,176
216,988
730,659
223,407
25,825
203,128
857,198
1,708,785
261,828
904,176
219,169
740,601
231,051
25,825
203,128
857,198
5,075,217
5,151,761
YTD Net
YTD
Under
Absorption
Deliveries
Const SF
Rates
19.9%
16.9%
35.4%
10.3%
13.5%
12.2%
4.6%
18.0%
15.9%
(1,898)
12,912
44,489
49,858
42,333
(33,204)
4,442
27,367
39,777
0
0
6,000
0
0
0
0
30,000
6,200
0
36,000
6,310
32,105
0
22,000
0
0
28,015
$24.17
$24.11
$21.48
$23.25
$22.70
$33.80
$23.65
$26.45
$20.86
17.6%
186,076
42,200
124,430
Vac %
Quoted
$23.50
Source: CoStar Property®
Class C Market Statistics
Third Quarter 2013
Existing Inventory
Market
Boca Raton
Boynton/Lantana
Delray Beach
Jupiter
North Palm Beach
Palm Beach
Palm Springs/Lake Worth
Royal Palm Bch/Wellington
West Palm Beach
# Blds
Totals
1,551
180
126
253
88
201
62
79
28
534
Total RBA
1,937,858
646,231
1,494,680
615,546
1,745,235
637,918
383,727
403,874
3,960,987
11,826,056
Vacancy
Direct SF
187,746
27,179
106,108
57,564
124,902
64,358
35,336
21,157
351,685
976,035
Total SF
194,185
27,179
111,952
58,564
133,565
64,358
35,336
21,157
356,085
1,002,381
YTD Net
YTD
Under
Absorption
Deliveries
Const SF
Rates
10.0%
4.2%
7.5%
9.5%
7.7%
10.1%
9.2%
5.2%
9.0%
(17,240)
2,067
(41,672)
939
(16,177)
3,081
(2,189)
13,137
(3,928)
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
$20.62
$19.21
$23.51
$17.75
$18.89
$25.22
$19.21
$22.67
$19.20
8.5%
(61,982)
Vac %
0
Quoted
0
$20.26
Source: CoStar Property®
Total Office Market Statistics
Existing Inventory
Third Quarter 2013
Vacancy
YTD Net
YTD
Under
Quoted
Deliveries
0
0
6,000
0
0
0
0
30,000
6,200
Const SF
0
36,000
6,310
101,795
0
22,000
0
0
28,015
Rates
$26.75
$23.29
$21.81
$24.11
$23.90
$34.71
$23.30
$25.77
$25.50
Market
Boca Raton
Boynton/Lantana
Delray Beach
Jupiter
North Palm Beach
Palm Beach
Palm Springs/Lake Worth
Royal Palm Bch/Wellington
West Palm Beach
# Blds
463
197
365
202
393
157
112
75
782
Total RBA
17,413,000
2,459,335
4,081,485
3,213,255
8,675,696
3,047,320
993,807
1,620,124
12,793,296
Direct SF
3,061,729
362,077
1,010,284
274,552
1,129,772
328,061
87,161
231,530
1,840,150
Total SF
3,139,225
365,854
1,016,128
277,733
1,148,676
335,705
87,161
231,530
1,884,375
Vac %
18.0%
14.9%
24.9%
8.6%
13.2%
11.0%
8.8%
14.3%
14.7%
Absorption
32,447
28,780
4,161
50,797
46,463
(23,630)
26,830
40,504
24,501
Totals
2,746
54,297,318
8,325,316
8,486,387
15.6%
230,853
42,200
194,120
$25.58
Source: CoStar Property®
8
THE COSTAR OFFICE REPORT
©2013 COSTAR GROUP, INC.
THIRD QUARTER 2013 – PALM BEACH COUNTY
Palm Beach County Office Market
FIGURES AT A GLANCE
Class A Market Statistics
Third Quarter 2013
Existing Inventory
Market
# Blds
Total RBA
Vacancy
Direct SF
Total SF
Vac %
YTD Net
YTD
Under
Quoted
Absorption
Deliveries
Const SF
Rates
CBD
23
3,507,590
661,598
701,423
20.0%
(17,848)
0
0
$37.01
Suburban
96
9,687,849
1,612,466
1,630,822
16.8%
124,607
0
69,690
$30.40
2,274,064
2,332,245
17.7%
106,759
69,690
$32.17
Totals
119
13,195,439
0
Source: CoStar Property®
Class B Market Statistics
Third Quarter 2013
Existing Inventory
Market
# Blds
Total RBA
Vacancy
Direct SF
Total SF
Vac %
YTD Net
YTD
Under
Quoted
Absorption
Deliveries
Const SF
Rates
CBD
254
5,966,728
958,069
965,713
16.2%
22,219
6,200
28,015
$24.11
Suburban
822
23,309,095
4,117,148
4,186,048
18.0%
163,857
36,000
96,415
$23.35
1,076
29,275,823
5,075,217
5,151,761
17.6%
186,076
42,200
124,430
Totals
$23.50
Source: CoStar Property®
Class C Market Statistics
Third Quarter 2013
Existing Inventory
Market
# Blds
Total RBA
Vacancy
Direct SF
Total SF
Vac %
YTD Net
YTD
Under
Quoted
Absorption
Deliveries
Const SF
Rates
CBD
561
4,303,916
362,895
367,295
8.5%
(8,618)
0
0
$19.84
Suburban
990
7,522,140
613,140
635,086
8.4%
(53,364)
0
0
$20.51
8.5%
(61,982)
Totals
1,551
11,826,056
976,035
1,002,381
0
0
$20.26
Source: CoStar Property®
Class A & B Market Statistics
Third Quarter 2013
Existing Inventory
Market
# Blds
Total RBA
Vacancy
Direct SF
Total SF
Vac %
YTD Net
YTD
Under
Quoted
Absorption
Deliveries
Const SF
Rates
CBD
277
9,474,318
1,619,667
1,667,136
17.6%
4,371
6,200
28,015
$29.07
Suburban
918
32,996,944
5,729,614
5,816,870
17.6%
288,464
36,000
166,105
$25.47
1,195
42,471,262
7,349,281
7,484,006
17.6%
292,835
42,200
194,120
$26.27
Totals
Source: CoStar Property®
Total Office Market Statistics
Existing Inventory
Market
CBD
# Blds
Total RBA
Third Quarter 2013
Vacancy
Direct SF
Total SF
Vac %
YTD Net
YTD
Under
Quoted
Absorption
Deliveries
Const SF
Rates
(4,247)
6,200
28,015
$27.48
838
13,778,234
1,982,562
2,034,431
14.8%
Suburban
1,908
40,519,084
6,342,754
6,451,956
15.9%
235,100
36,000
166,105
$24.99
Totals
2,746
54,297,318
8,325,316
8,486,387
15.6%
230,853
42,200
194,120
$25.58
Source: CoStar Property®
©2013 COSTAR GROUP, INC.
THE COSTAR OFFICE REPORT
9
PALM BEACH COUNTY – THIRD QUARTER 2013
Palm Beach County Office Market
FIGURES AT A GLANCE
Class A Market Statistics
Existing Inventory
Period
# Blds
2013 3q
2013 2q
2013 1q
2012 4q
2012 3q
2012 2q
2012 1q
2011
2010
2009
2008
2007
2006
2005
2004
2003
119
120
120
120
120
119
119
119
116
115
109
98
88
84
84
84
Total RBA
13,195,439
13,239,820
13,239,820
13,239,820
13,239,820
13,189,243
13,189,243
13,189,243
13,052,403
13,021,558
12,331,002
10,528,921
9,951,493
9,527,647
9,527,647
9,527,647
Third Quarter 2013
Vacancy
Direct SF
2,274,064
2,359,621
2,397,871
2,404,963
2,537,179
2,534,258
2,542,630
2,581,681
2,571,197
2,553,903
2,278,231
1,522,674
1,141,802
984,772
1,228,896
1,469,624
Total SF
2,332,245
2,440,016
2,439,770
2,439,004
2,578,224
2,578,530
2,598,018
2,656,745
2,690,419
2,766,801
2,534,756
1,663,629
1,171,246
1,070,358
1,325,505
1,578,088
Net
Deliveries
Vac %
Absorption
# Blds
17.7%
18.4%
18.4%
18.4%
19.5%
19.6%
19.7%
20.1%
20.6%
21.2%
20.6%
15.8%
11.8%
11.2%
13.9%
16.6%
107,771
(246)
(766)
139,220
50,883
19,488
58,727
170,514
107,227
458,511
930,954
40,664
322,958
255,147
252,583
224,033
0
0
0
0
1
0
0
3
1
6
11
10
4
0
0
4
Total RBA
0
0
0
0
50,577
0
0
136,840
30,845
690,556
1,802,081
577,428
423,846
0
0
239,165
UC Inventory
# Blds
2
2
2
0
0
1
1
1
3
2
6
13
15
7
2
0
Total RBA
69,690
69,690
69,690
0
0
50,577
50,577
50,577
136,840
62,845
690,556
2,276,984
2,011,965
673,108
365,721
0
Quoted
Rates
$32.17
$32.19
$31.35
$32.04
$32.36
$32.35
$32.29
$32.48
$31.93
$33.37
$34.12
$34.67
$32.94
$28.69
$26.39
$25.90
Source: CoStar Property®
Class B Market Statistics
Existing Inventory
Period
# Blds
2013 3q
2013 2q
2013 1q
2012 4q
2012 3q
2012 2q
2012 1q
2011
2010
2009
2008
2007
2006
2005
2004
2003
1,076
1,075
1,075
1,072
1,072
1,070
1,070
1,071
1,069
1,062
1,050
1,014
977
924
882
829
Total RBA
29,275,823
29,393,952
29,393,952
29,351,752
29,371,470
29,322,146
29,322,146
29,357,551
29,319,232
29,180,358
28,900,130
28,132,842
27,285,995
26,300,211
25,634,304
24,806,141
Third Quarter 2013
Vacancy
Direct SF
5,075,217
5,152,071
5,253,899
5,203,708
5,496,115
5,463,431
5,526,290
5,605,195
5,851,140
5,791,510
4,796,133
3,886,662
2,267,171
1,933,758
2,170,157
2,958,710
Total SF
5,151,761
5,236,297
5,334,288
5,286,805
5,521,845
5,524,135
5,594,621
5,683,926
5,929,186
5,975,501
4,969,989
4,052,006
2,326,828
2,048,587
2,211,485
3,106,630
Net
Deliveries
Vac %
Absorption
# Blds
17.6%
17.8%
18.1%
18.0%
18.8%
18.8%
19.1%
19.4%
20.2%
20.5%
17.2%
14.4%
8.5%
7.8%
8.6%
12.5%
93,368
97,991
(5,283)
215,322
51,614
70,486
53,900
283,579
185,189
(725,284)
(150,695)
(876,191)
718,905
828,805
1,723,308
711,684
0
0
3
1
2
0
0
2
7
12
35
37
53
42
53
42
Total RBA
0
0
42,200
27,490
49,324
0
0
38,319
138,874
280,228
761,349
846,847
985,784
665,907
953,829
869,954
UC Inventory
# Blds
6
8
8
5
5
6
4
2
1
5
13
30
39
51
51
47
Total RBA
124,430
133,262
133,262
70,782
76,272
119,014
106,814
49,324
30,000
66,874
320,228
639,783
952,841
1,011,045
821,370
802,470
Quoted
Rates
$23.50
$23.38
$22.15
$23.14
$23.09
$23.29
$23.26
$23.59
$24.06
$24.18
$25.92
$26.00
$23.99
$21.99
$21.41
$21.22
Source: CoStar Property®
Total Office Market Statistics
Existing Inventory
Period
# Blds
2013 3q
2013 2q
2013 1q
2012 4q
2012 3q
2012 2q
2012 1q
2011
2010
2009
2008
2007
2006
2005
2004
2003
2,746
2,747
2,747
2,744
2,744
2,741
2,741
2,742
2,737
2,729
2,710
2,660
2,612
2,553
2,504
2,442
Total RBA
54,297,318
54,496,500
54,496,500
54,454,300
54,474,018
54,374,117
54,374,117
54,409,522
54,234,363
54,064,644
53,065,060
50,483,863
49,056,749
47,772,746
47,049,966
46,164,930
Third Quarter 2013
Vacancy
Direct SF
8,325,316
8,447,792
8,577,888
8,540,548
9,024,854
8,962,056
9,050,947
9,205,567
9,461,394
9,397,526
7,964,114
6,183,272
4,030,160
3,513,193
3,701,927
4,838,572
Total SF
8,486,387
8,631,497
8,718,580
8,666,208
9,100,151
9,085,120
9,192,754
9,377,450
9,679,490
9,813,172
8,416,102
6,506,407
4,122,465
3,717,421
3,844,290
5,109,106
Net
Deliveries
Vac %
Absorption
# Blds
15.6%
15.8%
16.0%
15.9%
16.7%
16.7%
16.9%
17.2%
17.8%
18.2%
15.9%
12.9%
8.4%
7.8%
8.2%
11.1%
153,942
87,083
(10,172)
414,225
84,870
107,634
149,291
477,199
303,401
(397,486)
671,502
(999,069)
890,321
849,649
2,149,852
1,061,443
0
0
3
1
3
0
0
5
8
19
49
49
61
50
62
58
Total RBA
0
0
42,200
27,490
99,901
0
0
175,159
169,719
999,584
2,575,258
1,429,214
1,443,603
731,085
1,010,702
1,167,582
UC Inventory
# Blds
8
10
10
5
5
7
5
3
4
7
20
46
55
62
60
56
Total RBA
194,120
202,952
202,952
70,782
76,272
169,591
157,391
99,901
166,840
129,719
1,039,584
2,928,595
2,966,095
1,718,126
1,246,317
859,343
Quoted
Rates
$25.58
$25.55
$24.49
$25.50
$25.55
$25.67
$25.54
$25.80
$26.08
$26.52
$28.18
$28.47
$27.10
$24.19
$23.11
$22.86
Source: CoStar Property®
10
THE COSTAR OFFICE REPORT
©2013 COSTAR GROUP, INC.
THIRD QUARTER 2013 – PALM BEACH COUNTY
Palm Beach County Office Market
LEASING ACTIVITY
Historical Rental Rates
Based on Full-Service Equivalent Rental Rates
A
B
C
Total Market
$40.00
$35.00
Dollars/SF/Year
$30.00
$25.00
$20.00
$15.00
$10.00
$5.00
3q
1q
13
20
20
13
3q
1q
12
20
3q
20
12
1q
20
11
11
3q
20
20
20
10
1q
3q
10
1q
09
20
20
09
3q
1q
20
08
3q
20
08
1q
07
20
3q
07
20
06
20
20
06
1q
3q
1q
05
20
20
05
3q
1q
20
04
3q
20
20
04
03
1q
3q
03
02
20
20
1q
3q
02
20
1q
01
20
20
20
00
01
1q
3q
00
99
20
19
3q
$0.00
Source: CoStar Property®
Vacancy by Available Space Type
Vacancy by Class
Percent of All Vacant Space in Direct vs. Sublet
Percent of All Vacant Space by Class
Palm Beach County
United States
2%
Palm Beach County
United States
17%
12%
4%
27%
98%
Direct
34%
49%
61%
96%
Sublet
Direct
Class A
Sublet
Source: CoStar Property®
Class B
Class C
Class A
Class B
U.S. Rental Rate Comparison
Future Space Available
Based on Full-Service Equivalent Rental Rates
Space Scheduled to be Available for Occupancy*
Palm Beach County
United States
0.3
$30.00
0.22
$25.00
0.2
$20.00
0.2
Millions
Dollars/SF/Year
Class C
Source: CoStar Property®
$15.00
$10.00
0.12
0.1
0.06
$5.00
0.1
0.02
$0.00
2011
3q
2011
4q
Source: CoStar Property®
©2013 COSTAR GROUP, INC.
2012
1q
2012
2q
2012
3q
2012
4q
2013
1q
2013
2q
2013
3q
0.00
0.00
2014 4q
2015 1q
0.0
2013 4q
2014 1q
* Includes Under Construction Spaces
THE COSTAR OFFICE REPORT
2014 2q
2014 3q
Source: CoStar Property®
11
PALM BEACH COUNTY – THIRD QUARTER 2013
Palm Beach County Office Market
LEASING ACTIVITY
Select Top Office Leases
Based on Leased Square Footage For Deals Signed in 2013
Building
Submarket
SF
Qtr
Tenant Name
Tenant Rep Company
Landlord Rep Company
1
4700 T Rex Ave
Boca Raton North
72,047
2nd
Tyco Integrated Security
CBRE
CBRE
2
Phillips Point
West Palm Beach
40,000
3rd
Akerman Senterfitt LLC
Cresa
Taylor & Mathis of Florida, LLC
3
1615 S Congress
Delray Beach
39,788
1st
Aldridge Connors LLP
CBRE
CBRE
4
The Pointe
Jupiter
23,642
1st
Ventex
N/A
CBRE
5
4100 Okeechobee Blvd
West Palm Beach
20,251
2nd
N/A
N/A
In-Rel Properties
6
Lynn Financial Center - Building A, Phase II*
Boca Raton West
19,544
2nd
MDVIP, Inc.
N/A
Avison Young
7
Broken Sound Corporate Center
Boca Raton North
17,686
2nd
TherapeuticsMD, Inc.
Stoltz Realty Co. of Florida, Inc.
CBRE
8
Phillips Point (West Tower)
West Palm Beach
16,602
3rd
N/A
N/A
Taylor & Mathis of Florida, LLC
9
Fountain Square*
Boca Raton West
14,844
2nd
Stifel, Nicolaus & Co., Inc.
Cushman & Wakefield, Inc.
NAI/Merin Hunter Codman, Inc.
10
Lynn Financial Center - Building B, Phase II
Boca Raton West
12,944
1st
Polen Capital Management Inc
CBRE
Avison Young
11
One Town Center
Boca Raton West
12,647
2nd
Kayne Real Estate Advisors
CBRE
CBRE
12
Innovation Centre 6
Boca Raton East
12,644
1st
EPS-Global
Direct Deal
Avison Young
13
Wellington Medical Arts Pavilion
Royal Palm Bch/Wellington
12,244
3rd
N/A
N/A
Management Services Group of Health
14
2101 Centrepark West Dr
West Palm Beach
10,944
2nd
N/A
N/A
NAI/Merin Hunter Codman Inc.
15
3420 Fairlane Farms Rd
Palm Bch Cty Outlying
10,847
1st
Wells Pharmacy, Inc
Direct Deal
Adams Commercial Real Estate
16
Bosco Corporate Center
Delray Beach
10,653
3rd
N/A
N/A
Rubin Group Real Estate
17
Mizner Park Office Tower*
Boca Raton East
10,644
1st
Crocker Center Associates III, Ltd
N/A
Cushman & Wakefield, Inc.
18
Northbridge Pavilion
West Palm Beach
10,447
2nd
N/A
N/A
Gaedeke Group LLC
19
Yamato Office Center: Bldg II
Boca Raton North
10,342
2nd
Accountable Healthcare Staffing Inc
Direct Deal
CBRE
20
Northbridge Tower
West Palm Beach
10,244
1st
Kubicki Draper
CBRE
Gaedeke Group LLC
21
Centrepark 1475
West Palm Beach
9,644
2nd
N/A
N/A
NAI/Merin Hunter Codman Inc.
22
Innovation Centre 3
Boca Raton East
9,644
1st
FARDA
N/A
Avison Young
23
Yamato Office Center: Bldg II*
Boca Raton North
9,642
2nd
Xacti LLC
Direct Deal
CBRE
24
1400 Centrepark
West Palm Beach
9,544
2nd
N/A
N/A
NAI/Merin Hunter Codman Inc.
25
1675 Palm Beach Lakes Blvd
West Palm Beach
9,437
2nd
N/A
N/A
Pointe Group Advisors
26
One Boca Place
Boca Raton West
9,347
2nd
Reservage Organic
Whelchel Partners
CBRE
27
Lynn Financial Center - Building A, Phase II
Boca Raton West
9,325
2nd
MDVIP, Inc
N/A
Avison Young
28
Mizner Park Office Tower
Boca Raton East
9,299
3rd
GrayRobinson
Direct Deal
Cushman & Wakefield, Inc.
29
7000 Palmetto Plaza
Boca Raton West
9,247
3rd
Premedical, LLC
N/A
CBRE
30
Hagen Ranch Medical Center
Boynton/Lantana
9,044
2nd
N/A
Direct Deal
Butters Realty & Management
31
Flagler Center I
West Palm Beach
9,008
3rd
AMI
N/A
Cushman & Wakefield, Inc.
32
The Arbors Office Park - 1625
Delray Beach
8,947
1st
N/A
N/A
CBRE
33
RailAmerica Bldg*
Boca Raton North
8,837
2nd
ILS Technology LLC
N/A
Atlantic Commercial Group
34
Fairway Office Center - Phase I
North Palm Beach
8,544
3rd
N/A
N/A
NAI/Merin Hunter Codman Inc.
35
Fairway Office Center - Phase I
North Palm Beach
8,544
2nd
N/A
N/A
NAI/Merin Hunter Codman Inc.
36
Sabre II Centre
Boca Raton North
8,542
2nd
2Knome LLC
Direct Deal
CBRE
37
1800 Boca Center
Boca Raton West
8,447
3rd
N/A
N/A
CBRE
38
Sabre Centre I
Boca Raton North
8,251
1st
N/A
N/A
Cushman & Wakefield, Inc.
39
One City Centre
Boca Raton East
8,152
1st
Dawson James Securities, Inc.
DTZ
Penn-Florida Realty Corporation
40
Yamato Office Center - Building 1*
Boca Raton North
7,842
2nd
BCN Telecom
Colliers International, South Flori
CBRE
Source: CoStar Property®
* Renewal
12
THE COSTAR OFFICE REPORT
©2013 COSTAR GROUP, INC.
THIRD QUARTER 2013 – PALM BEACH COUNTY
Palm Beach County Office Market
SALES ACTIVITY
The Optimist Sales Index
Average of Two Highest Price/SF's and Two Lowest Cap Rates Per Quarter
Cap Rate
Price/SF
$450
12.0%
$400
$350
$300
8.0%
$250
6.0%
$200
Dollars/SF
Cap Rate Percentage
10.0%
$150
4.0%
$100
2.0%
$50
0.0%
$0
2010 3q
2010 4q
2011 1q
2011 2q
2011 3q
2011 4q
2012 1q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
Source: CoStar COMPS®
Sales Volume & Price
Sales Analysis by Building Size
Based on Office Building Sales of 15,000 SF and Larger
Based on Office Building Sales From July 2012 - June 2013
Bldg Size
Price/SF
$250
$200
$200
$150
$150
$100
$100
$50
$50
$0
Price/SF
Millions of Sales Volume Dollars
Sales Volume
$250
$0
#
RBA
$ Volume
Price/SF
Cap Rate
< 50,000 SF
78
874,815
$
145,218,795
$ 166.00
7.39%
50K-249K SF
11
802,056
$
97,810,500
$ 121.95
7.69%
250K-499K SF
-
-
-
$
-
-
>500K SF
-
-
-
$
-
-
2010 1q 2010 3q 2011 1q 2011 3q 2012 1q 2012 3q 2013 1q
Source: CoStar COMPS®
Source: CoStar COMPS®
U.S. Price/SF Comparison
U.S. Cap Rate Comparison
Based on Office Building Sales of 15,000 SF and Larger
Based on Office Building Sales of 15,000 SF and Larger
Palm Beach County
$270
US
Palm Beach County
12.0%
US
11.0%
Cap Rate Percentage
Dollars per SF
$220
$170
$120
$70
10.0%
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
$20
3.0%
2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013
1q 2q 3q 4q 1q 2q 3q 4q 1q 2q 3q 4q 1q 2q
Source: CoStar COMPS®
©2013 COSTAR GROUP, INC.
2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013
1q 2q 3q 4q 1q 2q 3q 4q 1q 2q 3q 4q 1q 2q
Source: CoStar COMPS®
THE COSTAR OFFICE REPORT
13
PALM BEACH COUNTY – THIRD QUARTER 2013
Palm Beach County Office Market
SALES ACTIVITY
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14
THE COSTAR OFFICE REPORT
©2013 COSTAR GROUP, INC.
THIRD QUARTER 2013 – PALM BEACH COUNTY
Palm Beach County Office Market
B O C A
R A T O N
M A R K E T
MARKET HIGHLIGHTS – CLASS “A, B & C”
Deliveries, Absorption & Vacancy Historical Analysis, All Classes
Delivered SF
0.200
Absorption SF
Vacancy
22.0%
0.150
21.0%
20.0%
0.050
19.0%
0.000
(0.050)
18.0%
Percent Vacant
Millions SF
0.100
(0.100)
17.0%
(0.150)
(0.200)
16.0%
2010 1q
2010 2q
2010 3q
2010 4q
2011 1q
2011 2q
2011 3q
2011 4q
2012 1q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2013 3q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
3.50
$27.00
Sublet SF
$26.80
3.40
$26.60
Dollars/SF/Year
Millions SF
3.30
3.20
3.10
3.00
$26.20
$26.00
$25.80
$25.60
2.90
$25.40
$25.20
2.80
2012 1q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2012 1q
2013 3q
Source: CoStar Property®
Period
2013 3q
$26.40
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2013 3q
Source: CoStar Property®
Existing Inventory
# Bldgs
Total RBA
463
17,413,000
Vacancy
Vacant SF
Vacancy %
3,139,225
18.0%
Net
Absorption
35,214
Delivered Inventory
# Bldgs
Total RBA
0
0
UC Inventory
# Bldgs
Total RBA
0
0
Quoted
Rates
$26.75
2013 2q
464
17,539,961
3,174,439
18.1%
11,544
0
0
0
0
$26.81
2013 1q
464
17,539,961
3,185,983
18.2%
(14,311)
0
0
0
0
$25.79
2012 4q
464
17,539,961
3,171,672
18.1%
149,240
0
0
0
0
$26.39
2012 3q
465
17,587,169
3,368,120
19.2%
(7,325)
0
0
0
0
$26.41
2012 2q
465
17,587,169
3,360,795
19.1%
33,265
0
0
0
0
$26.38
2012 1q
465
17,587,169
3,394,060
19.3%
116,561
0
0
0
0
$26.31
2011 4q
466
17,622,574
3,546,026
20.1%
(145,626)
1
8,319
0
0
$26.97
2011 3q
465
17,614,255
3,392,081
19.3%
93,096
0
0
1
8,319
$26.63
2011 2q
465
17,614,255
3,485,177
19.8%
179,706
1
32,000
1
8,319
$26.65
2011 1q
464
17,582,255
3,632,883
20.7%
(24,601)
0
0
2
40,319
$26.67
2010 4q
464
17,582,255
3,608,282
20.5%
133,500
0
0
1
32,000
$26.48
2010 3q
464
17,582,255
3,741,782
21.3%
26,526
0
0
1
32,000
$26.98
2010 2q
464
17,582,255
3,768,308
21.4%
(81,275)
0
0
1
32,000
$27.26
2010 1q
464
17,582,255
3,687,033
21.0%
18,390
0
0
1
32,000
$27.49
2009 4q
464
17,582,255
3,705,423
21.1%
62,135
0
0
1
32,000
$27.03
Source: CoStar Property®
©2013 COSTAR GROUP, INC.
THE COSTAR OFFICE REPORT
15
PALM BEACH COUNTY – THIRD QUARTER 2013
Palm Beach County Office Market
B O Y N T O N / L A N T A N A
M A R K E T
MARKET HIGHLIGHTS – CLASS “A, B & C”
Deliveries, Absorption & Vacancy Historical Analysis, All Classes
Delivered SF
0.060
Absorption SF
Vacancy
20.0%
18.0%
0.040
16.0%
14.0%
0.000
12.0%
10.0%
(0.020)
8.0%
(0.040)
Percent Vacant
Millions SF
0.020
6.0%
(0.060)
4.0%
(0.080)
2.0%
(0.100)
0.0%
2010 1q
2010 2q
2010 3q
2010 4q
2011 1q
2011 2q
2011 3q
2011 4q
2012 1q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2013 3q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
0.50
$26.50
Sublet SF
$26.00
0.45
$25.50
0.40
Dollars/SF/Year
Millions SF
0.35
0.30
0.25
0.20
$25.00
$24.50
$24.00
$23.50
0.15
$23.00
0.10
$22.50
0.05
$22.00
$21.50
0.00
2012 1q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2012 1q
2013 3q
Source: CoStar Property®
Period
2013 3q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2013 3q
Source: CoStar Property®
Existing Inventory
# Bldgs
Total RBA
197
2,459,335
Vacancy
Vacant SF
Vacancy %
365,854
14.9%
Net
Absorption
6,220
Delivered Inventory
# Bldgs
Total RBA
0
0
UC Inventory
# Bldgs
Total RBA
1
36,000
Quoted
Rates
$23.29
2013 2q
195
2,450,503
363,242
14.8%
12,834
0
0
3
44,832
$23.77
2013 1q
195
2,450,503
376,076
15.3%
9,726
0
0
3
44,832
$24.03
2012 4q
195
2,450,503
385,802
15.7%
38,184
1
27,490
1
6,582
$23.25
2012 3q
194
2,423,013
396,496
16.4%
38,631
0
0
2
34,072
$23.54
2012 2q
194
2,423,013
435,127
18.0%
(8,157)
0
0
1
27,490
$23.74
2012 1q
194
2,423,013
426,970
17.6%
(88,342)
0
0
1
27,490
$25.82
2011 4q
194
2,423,013
338,628
14.0%
(26,566)
0
0
0
0
$24.35
2011 3q
194
2,423,013
312,062
12.9%
(5,214)
0
0
0
0
$23.69
2011 2q
194
2,423,013
306,848
12.7%
13,159
0
0
0
0
$23.72
2011 1q
194
2,423,013
320,007
13.2%
23,337
0
0
0
0
$23.84
2010 4q
194
2,423,013
343,344
14.2%
(595)
0
0
0
0
$23.74
2010 3q
194
2,423,013
342,749
14.1%
(35,719)
0
0
0
0
$24.20
2010 2q
194
2,423,013
307,030
12.7%
22,222
1
10,769
0
0
$24.84
2010 1q
193
2,412,244
318,483
13.2%
(61,157)
0
0
1
10,769
$24.77
2009 4q
193
2,412,244
257,326
10.7%
24,779
0
0
1
10,769
$22.16
Source: CoStar Property®
16
THE COSTAR OFFICE REPORT
©2013 COSTAR GROUP, INC.
THIRD QUARTER 2013 – PALM BEACH COUNTY
Palm Beach County Office Market
D E L R A Y
B E A C H
M A R K E T
MARKET HIGHLIGHTS – CLASS “A, B & C”
Deliveries, Absorption & Vacancy Historical Analysis, All Classes
Delivered SF
0.100
Absorption SF
Vacancy
29.0%
0.080
28.0%
27.0%
0.040
26.0%
0.020
25.0%
0.000
Percent Vacant
Millions SF
0.060
24.0%
(0.020)
(0.040)
23.0%
2010 1q
2010 2q
2010 3q
2010 4q
2011 1q
2011 2q
2011 3q
2011 4q
2012 1q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2013 3q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
1.07
$22.50
Sublet SF
$22.00
1.06
$21.50
Dollars/SF/Year
Millions SF
1.05
1.04
1.03
1.02
1.01
$21.00
$20.50
$20.00
1.00
$19.50
0.99
$19.00
0.98
2012 1q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2012 1q
2013 3q
Source: CoStar Property®
Period
2013 3q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2013 3q
Source: CoStar Property®
Existing Inventory
# Bldgs
Total RBA
365
4,081,485
Vacancy
Vacant SF
Vacancy %
1,016,128
24.9%
Net
Absorption
30,934
Delivered Inventory
# Bldgs
Total RBA
0
0
UC Inventory
# Bldgs
Total RBA
1
6,310
Quoted
Rates
$21.81
2013 2q
365
4,081,485
1,047,062
25.7%
1,222
0
0
1
6,310
$21.88
2013 1q
365
4,081,485
1,048,284
25.7%
(27,995)
1
6,000
1
6,310
$20.05
2012 4q
364
4,075,485
1,014,289
24.9%
32,120
0
0
1
6,000
$21.59
2012 3q
364
4,075,485
1,046,409
25.7%
12,464
0
0
1
6,000
$21.39
2012 2q
364
4,075,485
1,058,873
26.0%
1,262
0
0
1
6,000
$21.43
2012 1q
364
4,075,485
1,060,135
26.0%
2,196
0
0
0
0
$21.39
2011 4q
364
4,075,485
1,062,331
26.1%
(16,717)
0
0
0
0
$21.71
2011 3q
364
4,075,485
1,045,614
25.7%
40,389
0
0
0
0
$21.38
2011 2q
364
4,075,485
1,086,003
26.6%
35,027
0
0
0
0
$21.55
2011 1q
364
4,075,485
1,121,030
27.5%
(14,587)
0
0
0
0
$21.43
2010 4q
364
4,075,485
1,106,443
27.1%
(20,124)
0
0
0
0
$21.48
2010 3q
364
4,075,485
1,086,319
26.7%
(13,174)
1
4,805
0
0
$22.88
2010 2q
363
4,070,680
1,068,340
26.2%
75,537
0
0
1
4,805
$23.25
2010 1q
363
4,070,680
1,143,877
28.1%
82,093
1
30,845
1
4,805
$23.28
2009 4q
362
4,039,835
1,195,125
29.6%
(25,186)
0
0
2
35,650
$23.29
Source: CoStar Property®
©2013 COSTAR GROUP, INC.
THE COSTAR OFFICE REPORT
17
PALM BEACH COUNTY – THIRD QUARTER 2013
Palm Beach County Office Market
J U P I T E R
M A R K E T
MARKET HIGHLIGHTS – CLASS “A, B & C”
Deliveries, Absorption & Vacancy Historical Analysis, All Classes
Delivered SF
0.140
Absorption SF
Vacancy
18.0%
0.120
16.0%
0.100
14.0%
Millions SF
12.0%
0.060
10.0%
0.040
8.0%
0.020
6.0%
0.000
(0.020)
4.0%
(0.040)
2.0%
(0.060)
Percent Vacant
0.080
0.0%
2010 1q
2010 2q
2010 3q
2010 4q
2011 1q
2011 2q
2011 3q
2011 4q
2012 1q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2013 3q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
0.45
$25.00
Sublet SF
$24.50
0.40
$24.00
Dollars/SF/Year
Millions SF
0.35
0.30
0.25
0.20
0.15
$23.50
$23.00
$22.50
$22.00
0.10
$21.50
0.05
$21.00
$20.50
0.00
2012 1q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2012 1q
2013 3q
Source: CoStar Property®
Period
2013 3q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2013 3q
Source: CoStar Property®
Existing Inventory
# Bldgs
Total RBA
202
3,213,255
Vacancy
Vacant SF
Vacancy %
277,733
8.6%
Net
Absorption
3,148
Delivered Inventory
# Bldgs
Total RBA
0
0
UC Inventory
# Bldgs
Total RBA
4
101,795
Quoted
Rates
$24.11
2013 2q
202
3,213,255
280,881
8.7%
23,951
0
0
4
101,795
$24.39
2013 1q
202
3,213,255
304,832
9.5%
23,698
0
0
4
101,795
$24.01
2012 4q
202
3,213,255
328,530
10.2%
26,271
0
0
0
0
$21.94
2012 3q
202
3,213,255
354,801
11.0%
20,224
0
0
0
0
$22.67
2012 2q
202
3,213,255
375,025
11.7%
19,700
0
0
0
0
$22.73
2012 1q
202
3,213,255
394,725
12.3%
63,117
0
0
0
0
$23.12
2011 4q
202
3,213,255
457,842
14.2%
10,289
0
0
0
0
$23.37
2011 3q
202
3,213,255
468,131
14.6%
6,883
0
0
0
0
$24.29
2011 2q
202
3,213,255
475,014
14.8%
7,572
2
61,365
0
0
$25.01
2011 1q
200
3,151,890
421,221
13.4%
3,452
0
0
2
61,365
$25.92
2010 4q
200
3,151,890
424,673
13.5%
115,534
1
63,000
2
61,365
$25.39
2010 3q
199
3,088,890
477,207
15.4%
(14,428)
0
0
3
124,365
$24.87
2010 2q
199
3,088,890
462,779
15.0%
(41,309)
0
0
3
124,365
$24.94
2010 1q
199
3,088,890
421,470
13.6%
(14,504)
1
7,300
1
63,000
$24.44
2009 4q
198
3,081,590
399,666
13.0%
(21,491)
0
0
1
7,300
$24.78
Source: CoStar Property®
18
THE COSTAR OFFICE REPORT
©2013 COSTAR GROUP, INC.
THIRD QUARTER 2013 – PALM BEACH COUNTY
Palm Beach County Office Market
N O R T H
P A L M
B E A C H
M A R K E T
MARKET HIGHLIGHTS – CLASS “A, B & C”
Deliveries, Absorption & Vacancy Historical Analysis, All Classes
Delivered SF
Absorption SF
Vacancy
15.5%
0.060
15.0%
0.040
14.5%
0.020
14.0%
0.000
13.5%
(0.020)
13.0%
(0.040)
12.5%
(0.060)
Percent Vacant
Millions SF
0.080
12.0%
2010 1q
2010 2q
2010 3q
2010 4q
2011 1q
2011 2q
2011 3q
2011 4q
2012 1q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2013 3q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
1.30
$25.00
Sublet SF
$24.50
$24.00
Dollars/SF/Year
Millions SF
1.25
1.20
1.15
$23.50
$23.00
$22.50
$22.00
$21.50
1.10
$21.00
$20.50
1.05
2012 1q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2012 1q
2013 3q
Source: CoStar Property®
Period
2013 3q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2013 3q
Source: CoStar Property®
Existing Inventory
# Bldgs
Total RBA
393
8,675,696
Vacancy
Vacant SF
Vacancy %
1,148,676
13.2%
Net
Absorption
31,094
Delivered Inventory
# Bldgs
Total RBA
0
0
UC Inventory
# Bldgs
Total RBA
0
0
Quoted
Rates
$23.90
2013 2q
394
8,720,077
1,179,770
13.5%
42,524
0
0
0
0
$23.58
2013 1q
394
8,720,077
1,222,294
14.0%
(27,155)
0
0
0
0
$22.09
2012 4q
394
8,720,077
1,195,139
13.7%
67,440
0
0
0
0
$24.17
2012 3q
394
8,720,077
1,262,579
14.5%
12,682
2
49,324
0
0
$23.92
2012 2q
392
8,670,753
1,225,937
14.1%
28,439
0
0
2
49,324
$24.44
2012 1q
392
8,670,753
1,254,376
14.5%
18,405
0
0
2
49,324
$24.07
2011 4q
392
8,670,753
1,272,781
14.7%
31,852
0
0
2
49,324
$23.92
2011 3q
392
8,670,753
1,304,633
15.0%
(41,362)
0
0
1
38,000
$24.42
2011 2q
392
8,670,753
1,263,271
14.6%
(4,078)
0
0
0
0
$24.58
2011 1q
392
8,670,753
1,259,193
14.5%
24,678
1
73,475
0
0
$24.81
2010 4q
391
8,597,278
1,210,396
14.1%
12,709
0
0
1
73,475
$25.74
2010 3q
391
8,597,278
1,223,105
14.2%
3,644
0
0
1
73,475
$25.29
2010 2q
391
8,597,278
1,226,749
14.3%
13,588
0
0
1
73,475
$25.08
2010 1q
391
8,597,278
1,240,337
14.4%
46,695
0
0
0
0
$25.38
2009 4q
391
8,597,278
1,287,032
15.0%
32,075
0
0
0
0
$25.21
Source: CoStar Property®
©2013 COSTAR GROUP, INC.
THE COSTAR OFFICE REPORT
19
PALM BEACH COUNTY – THIRD QUARTER 2013
Palm Beach County Office Market
P A L M
B E A C H
M A R K E T
MARKET HIGHLIGHTS – CLASS “A, B & C”
Deliveries, Absorption & Vacancy Historical Analysis, All Classes
Delivered SF
0.050
Absorption SF
Vacancy
12.0%
0.040
11.5%
0.020
11.0%
0.010
10.5%
0.000
(0.010)
10.0%
Percent Vacant
Millions SF
0.030
(0.020)
9.5%
(0.030)
(0.040)
9.0%
2010 1q
2010 2q
2010 3q
2010 4q
2011 1q
2011 2q
2011 3q
2011 4q
2012 1q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2013 3q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
0.36
$38.00
Sublet SF
$37.50
0.35
$37.00
Dollars/SF/Year
Millions SF
0.34
0.33
0.32
0.31
0.30
$36.00
$35.50
$35.00
$34.50
$34.00
0.29
$33.50
$33.00
0.28
2012 1q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2012 1q
2013 3q
Source: CoStar Property®
Period
2013 3q
$36.50
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2013 3q
Source: CoStar Property®
Existing Inventory
# Bldgs
Total RBA
157
3,047,320
Vacancy
Vacant SF
Vacancy %
335,705
11.0%
Net
Absorption
(3,580)
Delivered Inventory
# Bldgs
Total RBA
0
0
663
UC Inventory
# Bldgs
Total RBA
1
22,000
Quoted
Rates
$34.71
2013 2q
157
3,047,320
332,125
10.9%
0
0
1
22,000
$34.88
2013 1q
157
3,047,320
332,788
10.9%
(20,713)
0
0
1
22,000
$35.60
2012 4q
157
3,047,320
312,075
10.2%
36,005
0
0
1
22,000
$35.14
2012 3q
157
3,047,320
348,080
11.4%
(25,783)
0
0
0
0
$35.60
2012 2q
157
3,047,320
322,297
10.6%
(1,904)
0
0
0
0
$36.56
2012 1q
157
3,047,320
320,393
10.5%
34,500
0
0
0
0
$37.76
2011 4q
157
3,047,320
354,893
11.6%
(2,361)
0
0
0
0
$39.19
2011 3q
157
3,047,320
352,532
11.6%
(14,434)
0
0
0
0
$35.65
2011 2q
157
3,047,320
338,098
11.1%
(25)
0
0
0
0
$35.81
2011 1q
157
3,047,320
338,073
11.1%
(32,720)
0
0
0
0
$33.77
2010 4q
157
3,047,320
305,353
10.0%
40,176
0
0
0
0
$33.28
2010 3q
157
3,047,320
345,529
11.3%
0
0
0
0
$33.67
2010 2q
157
3,047,320
344,893
11.3%
4,498
1
4,000
0
0
$32.24
2010 1q
156
3,043,320
345,391
11.3%
1,714
0
0
1
4,000
$33.86
2009 4q
156
3,043,320
347,105
11.4%
715
0
0
1
4,000
$35.19
(636)
Source: CoStar Property®
20
THE COSTAR OFFICE REPORT
©2013 COSTAR GROUP, INC.
THIRD QUARTER 2013 – PALM BEACH COUNTY
Palm Beach County Office Market
P A L M
S P R I N G S / L A K E
W O R T H
MARKET HIGHLIGHTS – CLASS “A, B & C”
M A R K E T
Deliveries, Absorption & Vacancy Historical Analysis, All Classes
Delivered SF
0.060
Absorption SF
Vacancy
14.0%
0.050
12.0%
10.0%
0.030
8.0%
0.020
6.0%
0.010
Percent Vacant
Millions SF
0.040
4.0%
0.000
2.0%
(0.010)
(0.020)
0.0%
2010 1q
2010 2q
2010 3q
2010 4q
2011 1q
2011 2q
2011 3q
2011 4q
2012 1q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2013 3q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
0.12
$26.00
Sublet SF
$25.00
$24.00
Dollars/SF/Year
Millions SF
0.10
0.08
0.06
0.04
$23.00
$22.00
$21.00
$20.00
0.02
$19.00
$18.00
0.00
2012 1q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2012 1q
2013 3q
Source: CoStar Property®
Period
2013 3q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2013 3q
Source: CoStar Property®
Existing Inventory
# Bldgs
Total RBA
112
993,807
Vacancy
Vacant SF
Vacancy %
87,161
8.8%
Net
Absorption
1,603
Delivered Inventory
# Bldgs
Total RBA
0
0
UC Inventory
# Bldgs
Total RBA
0
0
Quoted
Rates
$23.30
2013 2q
112
993,807
88,764
8.9%
1,190
0
0
0
0
$23.35
2013 1q
112
993,807
89,954
9.1%
24,037
0
0
0
0
$20.97
2012 4q
112
993,807
113,991
11.5%
(8,583)
0
0
0
0
$24.03
2012 3q
112
993,807
105,408
10.6%
(5,892)
1
50,577
0
0
$23.87
2012 2q
111
943,230
48,939
5.2%
(8,539)
0
0
1
50,577
$23.99
2012 1q
111
943,230
40,400
4.3%
5,496
0
0
1
50,577
$25.07
2011 4q
111
943,230
45,896
4.9%
7,522
0
0
1
50,577
$24.59
2011 3q
111
943,230
53,418
5.7%
1,787
0
0
1
50,577
$24.18
2011 2q
111
943,230
55,205
5.9%
3,557
0
0
0
0
$21.51
2011 1q
111
943,230
58,762
6.2%
3,345
0
0
0
0
$20.33
2010 4q
111
943,230
62,107
6.6%
(939)
0
0
0
0
$20.24
2010 3q
111
943,230
61,168
6.5%
(5,276)
0
0
0
0
$20.75
2010 2q
111
943,230
55,892
5.9%
13,180
0
0
0
0
$22.10
2010 1q
111
943,230
69,072
7.3%
(6,415)
0
0
0
0
$22.25
2009 4q
111
943,230
62,657
6.6%
11,489
0
0
0
0
$22.34
Source: CoStar Property®
©2013 COSTAR GROUP, INC.
THE COSTAR OFFICE REPORT
21
PALM BEACH COUNTY – THIRD QUARTER 2013
Palm Beach County Office Market
R O Y A L
P A L M
B C H / W E L L I N G T O N
M A R K E T
MARKET HIGHLIGHTS – CLASS “A, B & C”
Deliveries, Absorption & Vacancy Historical Analysis, All Classes
Delivered SF
0.050
Absorption SF
Vacancy
25.0%
0.040
20.0%
0.020
15.0%
0.010
10.0%
0.000
(0.010)
Percent Vacant
Millions SF
0.030
5.0%
(0.020)
(0.030)
0.0%
2010 1q
2010 2q
2010 3q
2010 4q
2011 1q
2011 2q
2011 3q
2011 4q
2012 1q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2013 3q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
0.27
$26.00
Sublet SF
$25.50
Dollars/SF/Year
Millions SF
0.26
0.25
0.24
0.23
$24.50
$24.00
$23.50
0.22
$23.00
0.21
2012 1q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2012 1q
2013 3q
Source: CoStar Property®
Period
2013 3q
$25.00
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2013 3q
Source: CoStar Property®
Existing Inventory
# Bldgs
Total RBA
75
1,620,124
Vacancy
Vacant SF
Vacancy %
231,530
14.3%
Net
Absorption
(3,597)
Delivered Inventory
# Bldgs
Total RBA
0
0
UC Inventory
# Bldgs
Total RBA
0
0
Quoted
Rates
$25.77
2013 2q
75
1,620,124
227,933
14.1%
13,352
0
0
0
0
$25.09
2013 1q
75
1,620,124
241,285
14.9%
30,749
1
30,000
0
0
$23.96
2012 4q
74
1,590,124
242,034
15.2%
(1,493)
0
0
1
30,000
$25.32
2012 3q
74
1,590,124
240,541
15.1%
16,836
0
0
1
30,000
$25.46
2012 2q
74
1,590,124
257,377
16.2%
6,024
0
0
1
30,000
$25.36
2012 1q
74
1,590,124
263,401
16.6%
(1,379)
0
0
1
30,000
$25.04
2011 4q
74
1,590,124
262,022
16.5%
11,372
0
0
0
0
$25.36
2011 3q
74
1,590,124
273,394
17.2%
23,083
0
0
0
0
$26.67
2011 2q
74
1,590,124
296,477
18.6%
(3,393)
0
0
0
0
$26.31
2011 1q
74
1,590,124
293,084
18.4%
13,090
0
0
0
0
$26.79
2010 4q
74
1,590,124
306,174
19.3%
5,521
0
0
0
0
$27.14
2010 3q
74
1,590,124
311,695
19.6%
40,954
0
0
0
0
$25.91
2010 2q
74
1,590,124
352,649
22.2%
(24,267)
0
0
0
0
$26.86
2010 1q
74
1,590,124
328,382
20.7%
19,394
1
40,000
0
0
$27.71
2009 4q
73
1,550,124
307,776
19.9%
4,032
0
0
1
40,000
$27.55
Source: CoStar Property®
22
THE COSTAR OFFICE REPORT
©2013 COSTAR GROUP, INC.
THIRD QUARTER 2013 – PALM BEACH COUNTY
Palm Beach County Office Market
W E S T
P A L M
B E A C H
M A R K E T
MARKET HIGHLIGHTS – CLASS “A, B & C”
Deliveries, Absorption & Vacancy Historical Analysis, All Classes
Delivered SF
0.200
Absorption SF
Vacancy
20.0%
18.0%
0.150
16.0%
14.0%
12.0%
0.050
10.0%
0.000
8.0%
Percent Vacant
Millions SF
0.100
6.0%
(0.050)
4.0%
(0.100)
2.0%
(0.150)
0.0%
2010 1q
2010 2q
2010 3q
2010 4q
2011 1q
2011 2q
2011 3q
2011 4q
2012 1q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2013 3q
Source: CoStar Property®
Vacant Space
Quoted Rental Rates
Historical Analysis, All Classes
Historical Analysis, All Classes
Direct SF
$26.50
Sublet SF
2.05
$26.00
2.00
$25.50
Dollars/SF/Year
Millions SF
2.10
1.95
1.90
1.85
1.80
$24.50
$24.00
$23.50
1.75
$23.00
1.70
2012 1q
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2012 1q
2013 3q
Source: CoStar Property®
Period
2013 3q
$25.00
2012 2q
2012 3q
2012 4q
2013 1q
2013 2q
2013 3q
Source: CoStar Property®
Existing Inventory
# Bldgs
Total RBA
782
12,793,296
Vacancy
Vacant SF
Vacancy %
1,884,375
14.7%
Net
Absorption
52,906
Delivered Inventory
# Bldgs
Total RBA
0
0
UC Inventory
# Bldgs
Total RBA
1
28,015
Quoted
Rates
$25.50
2013 2q
783
12,829,968
1,937,281
15.1%
(20,197)
0
0
1
28,015
$25.36
2013 1q
783
12,829,968
1,917,084
14.9%
(8,208)
1
6,200
1
28,015
$24.38
2012 4q
782
12,823,768
1,902,676
14.8%
75,041
0
0
1
6,200
$25.74
2012 3q
782
12,823,768
1,977,717
15.4%
23,033
0
0
1
6,200
$26.07
2012 2q
782
12,823,768
2,000,750
15.6%
37,544
0
0
1
6,200
$26.23
2012 1q
782
12,823,768
2,038,294
15.9%
(1,263)
0
0
0
0
$25.45
2011 4q
782
12,823,768
2,037,031
15.9%
57,111
0
0
0
0
$25.32
2011 3q
782
12,823,768
2,094,142
16.3%
170,970
0
0
0
0
$25.41
2011 2q
782
12,823,768
2,265,112
17.7%
39,346
0
0
0
0
$25.77
2011 1q
782
12,823,768
2,304,458
18.0%
8,260
0
0
0
0
$26.08
2010 4q
782
12,823,768
2,312,718
18.0%
24,539
1
9,000
0
0
$26.71
2010 3q
781
12,814,768
2,328,257
18.2%
(106,387)
0
0
1
9,000
$26.62
2010 2q
781
12,814,768
2,221,870
17.3%
(24,740)
0
0
1
9,000
$27.23
2010 1q
781
12,814,768
2,197,130
17.1%
53,932
0
0
0
0
$27.22
2009 4q
781
12,814,768
2,251,062
17.6%
(77,592)
0
0
0
0
$27.63
Source: CoStar Property®
©2013 COSTAR GROUP, INC.
THE COSTAR OFFICE REPORT
23