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PALM BEACH COUNTY, FL-The local industrial market showed some significant signs of improvement in the second quarter, according to an industrial overview for the market recently released by Cushman & Wakefield.

However, some submarkets seemed to be struggling in certain areas. Meanwhile, the county’s overall absorption was negative 458,053 sf year to date, the report states, and its overall vacancy rate increased from 7.1% at the end of the second quarter 2002 to 7.8% the same time this year.

While a similar report by Codina Realty Services Inc. ONCOR International shows year-to-date net absorption for the county at negative 220,204 sf, the report states that it will not likely improve this year. And while that report showed a slightly different figure for the overall vacancy rate at the end of the second quarter–5.6%–it also reported the figure was increasing, from 4.1% at year end 2002.

According to the C & W report, one submarket that contributed to the negative absorption was Riviera Beach, which had about 321,000 sf of negative absorption in the second quarter. The Codina report also finds this submarket struggling: Riviera Beach “closed mid-year in a disappointing finale. Poor leasing activity continues to impact absorption levels.”

That submarket also showed the most significant vacancy hike, from 4.8% after the first quarter to 8% one quarter later, the report states.

Boynton Beach, however, had the county’s highest vacancy rate, at 18.4%, according to C & W. However, that is an improvement of 2.5 percentage points, compared with the 20.9% at the end of second quarter 2002.

Two of the county’s biggest leasing deals contributed to that improvement. In one transaction, Lawson Industries signed a 30,498-sf warehouse distribution lease at Quantum Corporate Park, and in a separate transaction Masco Contractor Services Center relocated to 21,653 sf in the American Aluminum Building.

While these deals were significant, the most significant leasing transactions in the second quarter occurred in West Palm Beach, according to C & W. More than 40% of the county’s leasing activity took place in that submarket.

Also ending the quarter with strong numbers was Jupiter. Leasing activity there totaled 188,000 sf by the end of the second quarter, compared with 29,250 sf by mid-year 2002.

On the other hand, the leasing picture didn’t look as bright in the Boca Raton submarket. Leasing there had decreased 16% to 179,179 sf at the end of the second quarter, compared with 215,087 sf a year earlier.

While the local industrial market has experienced improvement, for the county to overcome its overall negative absorption and recover fully, it needs significant leasing activity and lower rental rates, according to the C & W report.

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