Palm Beach industrial is digesting a supply cycle that arrived just as demand cooled. Headline vacancy of 7.6% — up from a 2.6% low in 2022 and now a hair above the 7.5% U.S. rate — masks the split that sets deal terms here: the roughly 85 buildings of 100,000 SF or more are about 19% vacant, while product under 100,000 SF holds near 4.1%. Yet landlords still have the pen: rent grew 2.4% over the year, nearly double the 1.3% national pace, off a blended $18.37/SF. Sales ran roughly $798 million over the trailing twelve months at a modeled $220/SF and cap rates near 6.5% — against ~$161 and 7.3% nationally. With the pipeline thinned to 1.2% of stock and 42.5% of it preleased, this is a market re-pricing space, not appetite.
What Happened in Q3
Four threads run through Palm Beach this quarter — absorption stayed underwater as newly delivered big boxes sat unspoken-for, vacancy split hard by building size, rent kept climbing above the national clip even as it decelerated, and the construction pipeline pulled back well under its ten-year norm:
- A year in the red. Net absorption ran roughly −340,000 SF over the trailing year and −84,000 SF in the quarter, a swing from about +360,000 SF the year prior. Newer product since 2023 draws the move-ins; older, dated space carries the move-outs.
- Two markets, one county. The ~85 buildings at 100,000 SF or more sit about 19% vacant; everything under 100,000 SF holds near 4.1%, with Lake Worth East, 45th Street, and Boca Raton West under 3%. The slack lives in the big boxes that landed into a softer market.
- Cooling, but still hot. Asking rents rose 2.4% over the year — down from a 12%-plus pace in 2022, yet nearly double the 1.3% national rate. The blended level held at $18.37 PSF. The premium sits in flex and infill; new big-box quotes sink toward $12 PSF.
- The pipeline pulls back. At about 888,000 SF, the pipeline is 1.2% of inventory — well below the ~2.9M-SF peak of early 2023 and under the 1.0M-SF ten-year average. And 42.5% of what is underway is preleased, a healthier ratio than big-box vacancy suggests.
By Submarket
Palm Beach’s largest industrial submarkets, ranked by inventory. Palm Beach County Outlying leads on size and carries the deepest construction pipeline — and, with the airport belt, most of the recent big-box slack. Boca Raton East, Jupiter, and the Broken Sound corridor stay tight and price at the top.
| Submarket | Vacancy | Asking Rent / SF | 12-Mo Net Absorption |
|---|---|---|---|
| Palm Beach County Outlying | 20.2% | $13.74 | (10K SF) |
| Boynton Beach | 12.9% | $17.21 | (79K SF) |
| West of Turnpike | 3.4% | $18.40 | 111K SF |
| Central Palm Beach Area | 3.6% | $16.48 | (98K SF) |
| Park at Broken Sound | 3.1% | $21.89 | 102K SF |
| Palm Beach Airport | 12.3% | $19.33 | (404K SF) |
| Lake Worth West | 4.3% | $19.50 | (70K SF) |
| Palm Beach overall | 7.6% | $18.37 | (340K SF) |
Asking rent in $/SF NNN; net absorption trailing 12 months, negatives in parentheses. Ranked by inventory; top seven of 23 submarkets shown. Vacancy is where you sit — the Broken Sound corridor, West of Turnpike, and the central county stay tight; the outlying and airport big-box submarkets carry the county’s slack.
Capital Markets
Palm Beach industrial traded roughly $798 million over the trailing twelve months — well ahead of the ~$478 million ten-year average, so activity is running hot rather than stalling, even after the 2021–22 spike faded. Price is the story: a modeled $220 per square foot and cap rates near 6.5%, against $161/SF and 7.3% nationally. Buyers are paying up for a wealth-driven, land-constrained South Florida growth market — and underwriting the discipline, not walking away from it.
Comparable-sale pricing centers on a $248 median across 239 deals, against a $198 average — small infill trades drag the average down, so the median reads truer for institutional product. By subtype, logistics leads volume at $616M and prices at $210/SF on 6.4% caps, while flex prices highest at $240/SF on 6.9% caps across $94.9M of volume. Private investors and users account for roughly 60% of volume, institutions another ~20%, with private equity and owner-users near 10% each — conviction here is local and long-hold. The constraint is basis, not appetite. With rent growth normalizing toward ~1% and cap rates in the mid-6s, buyers are underwriting to durable in-place income and functional small-bay, not to another rent surge. Tenanted, well-located product still clears; speculative big-box is where the bid-ask has yet to close.
From the Principals
What we’re seeing on the ground — beyond the tape.
“Palm Beach doesn’t have a demand problem — it has a land problem. A wealthy, still-growing county with almost nothing left to build will always run tighter than its vacancy rate reads.”
The 7.6% headline is a handful of empty big boxes doing the talking. Strip out the ~85 buildings over 100,000 SF — near 19% vacant on four big-box leases in two years — and the space you can actually rent is nearly full: under 4.1% below 100,000 SF, sub-3% in Lake Worth East, along 45th Street, and in Boca Raton West. Eighty-five percent of the last two years’ leasing happened under 20,000 SF — a built-out county of local businesses, not national distributors. That’s the thesis: land is the constraint, wealth and in-migration are the demand, and neither is changing. Starts have pulled back and 42.5% of the pipeline is preleased, so 2027 sets up tighter than today reads. The play is functional infill you can hold and push on rent.
— Matthew L. Phillips, SIOR · Principal · (561) 621-5466 · Matt@IronmarkCRE.com
“You don’t buy Palm Beach for yield — you buy it because they stopped making it. At mid-6 caps against a 7.3% national print, the premium is the barrier to entry, and it isn’t coming in.”
Roughly $798 million changed hands over the trailing year against a $478 million ten-year average — this market is trading heavier than its own history, not cooling. What you pay for is the barrier itself: a modeled $220 per foot and cap rates near 6.5%, versus $161 and 7.3% nationally. That spread is what a supply-constrained, high-income, in-migrating county costs, with no new-supply valve to relieve it. Private buyers and users are still about 60% of volume, institutions near a fifth — conviction here is local and long-hold. With rent growth normalizing toward ~1%, we underwrite durable in-place income, not appreciation. Tenanted, well-located product clears; speculative big box is the only place the bid-ask still has to close.
— Troy Schaafsma, SIOR · Principal · (561) 621-5489 · Troy@IronmarkCRE.com
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Ironmark Florida Industrial Brief — Palm Beach Edition. This brief is Ironmark Capital Advisory’s own analysis and commentary, current as of 3Q 2026; it is informational and not tax, legal, or investment advice. © 2026 Ironmark Capital Advisory.