CRE retail in Palm Beach County, Florida, is cooling off for the most part to start in 2025. For one, vacancy shot up by 50 basis points year-over-year to 4.1 percent and 20 basis points from the previous three months in the first quarter, according to a market report from Colliers. The Boca Raton East submarket had the highest individual rate, at 6.9 percent.
"This uptick in vacancy reflects ongoing market adjustments as tenants reevaluate space needs following recent shifts in demand," Colliers explained.
That came as net absorption went from a positive 156,800 square feet in the fourth quarter to a negative -108,500 square feet in the first quarter. In the previous 12 months, the category was also in negative territory, at -143,800 square feet.
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Additionally, the trends had a pullback effect on leasing rates. Asks averaged just $29.14 per square foot NNN, a 30-cent drop from the previous three months.
That said, deal activity was encouraging. Colliers noted that demand for leasing "remained strong," with 454,478 square feet of signings at the beginning of 2025. That amount was also the strongest compared with the other South Florida regions (Broward County and Miami-Dade), which all together with Palm Beach, inked 1.2 million square feet of leases in the period.
But Colliers pointed out: "However, leasing volume has gradually declined over the past two years, a trend reflecting the market’s ongoing supply constraints rather than a lack of demand."
BJ's Wholesale Club secured the top lease in Palm Beach with its 53,065 square foot deal at Marketplace of Delray (14535 S Military Trl). The next largest was Beauty Master, which took 47,209 square feet at Cross County Plaza (4346-4370 Okeechobee Blvd).
Also, Colliers said that sales activity in Palm Beach's retail sector was "strong" — but did not reveal any specifics on the volume or the number of total transactions. Kite Realty Group Trust made the top acquisition with its $68.4 million deal to take over a property in the West Palm Beach submarket.
While there are concerns about tariffs and how they will affect prices, Colliers predicts that the strong return to office recovery in South Florida will "stimulate the retail market by boosting local businesses, including restaurants and retail stores, through increased foot traffic and demand."
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