Supply
Overall vacancy rose 90 basis points (bps) quarter-over-quarter (QOQ) and 50 bps year-over-year (YOY), ending the quarter at 9.0%. The increase was driven by the full delivery of The District, a 520,000-square-foot (sf), seven-building development in Boynton Beach. It was the first delivery of 2026, with nearly 81.0% of the space still available for lease. Outside of Boynton Beach, vacancy fell in nearly every other submarket, led by Jupiter, where a 210 bps drop to 21.4% marked the county’s largest improvement. The construction pipeline shrank to a two-year low, with just over 400,000 sf under development at quarter-end, all of which is expected to deliver by year-end. With less than 13.0% of that space still available, upward supply pressure should be limited. Although the proposed pipeline of almost 6.0 million sf suggests potential pressure heading into next year, longer build timelines and a lack of recent construction starts mean 2027 is forecast to deliver one of the lowest totals since 2019. Market vacancy is expected to trend downward over the next 12 to 18 months.
Demand
New leasing activity increased 47.1% QOQ, ending a four-quarter streak of declining deal volume. Q3’s 301,000 sf of leasing pushed the year-to-date (YTD) total to almost 830,000 sf. Mirroring the broader South Florida metro market, increased renewal activity supplemented a normalized new deal total, with 2026 renewals exceeding 765,000 sf, a post-pandemic high. Overall absorption turned positive in the third quarter, totaling more than 85,000 sf. The gain offset earlier net occupancy losses and pushed YTD absorption back into positive territory near 29,000 sf. Palm Beach benefited from new supply, as move-ins by The Brooks Racquet Club and American Twister combined for almost 100,000 sf of occupancy gains at The District. Ryan Friedman (29,000 sf) and Snyder-Lance (25,000 sf) also moved into buildings delivered within the last three years.
Pricing
Palm Beach County’s overall average asking rental rate jumped 4.9% QOQ, with The Districts’ over $20.00 per square foot (psf) average asking rents lifting the overall market rate. Palm Beach finished Q3 at $14.45 psf, a 4.3% increase YOY and its highest point in three years. Outside of Boynton Beach, Boca Raton was the only submarket to record an annual rise, up 4.2% to $18.25 psf. Limited new supply should support rent growth, though the average may moderate as the county’s premium space leases up.
