Falling prices for vacant industrial land means that owner-users can buy parcels at discounted prices and put up buildings at low cost, says Ed Kearney, managing director of Kearney Commercial Realty/Sperry Van Ness in West Palm Beach, Fla.
“Land prices took off in 2006 and 2007, as homebuilders outbid commercial developers for parcels,” says Kearney, who has worked in the Palm Beach market an 25 years. “The industrial market was not immune, as investors went on a land grab. When the housing market collapsed, so did land prices. Now, commercial developers have their pick of good spots.”
Prices had reached a point where industrial land was $10 or more per square foot, but that has dropped dramatically to as little as $2 per foot, said Kearney of Kearney Commercial Realty.
“While developers would logically be hesitant to jump into a market where the vacancy rate is high and climbing,” said Kearney, “those who plan to occupy what they build can get in at prices that are very reasonable. And they will be protected from rent rises when the Palm Beach economy recovers.”
Building costs have also fallen, as crews went idle after both home and commercial construction essentially came to a halt in the Palm Beach market, said Kearney of Sperry Van Ness. Some builders will do work for close to cost just to keep their crews busy.
“With tilt-wall construction becoming commonplace on industrial buildings, the cost of getting into a quality space has come down dramatically and become much easier,” Kearney said. “In dollar terms, properties that had $30 or more per square foot of land value built into their properties can now be constructed for $6 to $8 in land value.”
There are a number of good spots throughout Palm Beach County available for industrial construction, said Kearney of Kearney Commercial Realty. “But to find the right-size space in the best location, you need an experienced broker. Some of the best deals won’t show up in an online database search”
About Edward Kearney and Sperry Van Ness
Edward Kearney is managing director of Kearney Commercial Realty Inc./Sperry Van Ness with an extensive background in various aspects of commercial real estate including investment analysis, landlord and tenant representation, and property tax abatement. SVN is a leading national brokerage firm that markets commercial real estate properties to an investment and brokerage community of more than 100,000. Kearney welcomes investors, brokers, and others with an interest in the Florida commercial real estate market to contact him today by calling 561-616-6262, or visiting http://www.svnpalmbeach.com for more information about the services he provides.
For more information about Edward Kearney and Kearney Commercial Realty Inc./Sperry Van Ness, please visit http://www.svnpalmbeach.com.
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