Michael Emilio

From the Palm Beach Post:

Warehouse condos are a little-noticed niche that has boomed in the past few years in Palm Beach County, because of microscopic vacancy rates for industrial space.

West Palm Commerce Park on Haverhill Road is nearly sold out to buyers who took warehouse spaces as small as 2,000 square feet. That’s not the only warehouse condo that’s selling briskly.

The 120,000-square-foot Port Commerce Center in Riviera Beach is 50 percent sold out before breaking ground, said Kerry Jackson, the CB Richard Ellis broker who’s marketing the project.

And Jackson said Wallace Drive Commerce Center in Delray Beach is more than 50 percent sold.

Its 2,900-square-foot warehouses are selling for $500,000 to $600,000, and buyers include a high-end home theater company, a tile company and a construction company.

Developers have built about 2 million square feet of industrial condos in Palm Beach County during the past three years, Jackson says, a trend he calls the result of rising land prices.

When dirt grows more expensive, developers look for ways to charge more for space, and these condos fit the bill.

“It’s a sign that the market is getting built out,” Jackson says. “As a general rule, the smaller the space, the higher the price per square foot.”

Prices have risen from $125 a square foot to $200 a square foot during the past few years, he said.

The office condo market has been a bit spottier. A CB Richard Ellis study reports overbuilding of office condos in Miami-Dade County.

“To a smaller extent, that’s true here,” said Peter Applefield of ApplefieldWaxman in West Palm Beach. “In some places, it’s arguably an overbuilt market.”

Buyers of office condos are especially sensitive to interest rates, which have risen a bit in the past two years.

Applefield isn’t too worried, however. If developers can’t sell office condos, they can always lease them.

And he says the overbuilding doesn’t extend to Lake Worth, where he’s marketing two office condos, including the Promenade downtown and another project at 10th Avenue North and Interstate 95.