Retail, warehouse vacancies in Palm Beach County hit 10-year lows

Palm Beach County’s commercial real estate market continues to bounce back from the Great Recession. First-quarter vacancy rates fell to 3.8 percent for industrial properties and 4.4 percent for retail space, both 10-year-lows, Colliers International said.

Rents have been rising. For warehouses, the average rent climbed to $8.66 per square foot in the first quarter, up from $7.38 two years ago. For retail space, average rents rose to $19.68, up from $17.76 two years ago.

The resilience of the retail sector is particularly striking. Despite store closings by Sports Authority, Macy’s and JCPenney, the overall retail market is doing well.

Palm Beach County’s office market also is seeing less vacancy and rising rents. The first-quarter vacancy rate was 12.2 percent, unchanged from the fourth quarter but down from 15.1 percent two years ago. The average rent was $28.16 per square foot, up from $26.24 two years ago.

Trump, China and Twitter: 9 tweets that likely irked PRC leaders

President Donald Trump hosts his Chinese counterpart at Mar-a-Lago next week. It’s the second global — and Asian — leader the president brings to the Southern White House.

But this meeting may not be as amicable as the golf diplomacy with Japan’s prime minister, Shinzo Abe. In fact, People’s Republic President Xi Jinping will not stay at Mr. Trump’s Palm Beach club but instead will spend the night in Manalapan.

President Donald Trump arrives at Palm Beach International Airport on Air Force One Friday, February 10, 2016 accompanied by First Lady Melania Trump, Prime Minister Shinzo Abe Abe, and the Prime Minister’s wife Akie Abe. Damon Higgins / The Palm Beach Post

Why? Well, Twitter may have something to do with it.

RELATED: Will Palm Beach County benefit when Trump brings  a global leader?

On the campaign trail, Candidate Trump frequently blasted the trade deficit with China, saying the People’s Republic was “ripping off” Americans via unfair trade and monetary practices. Those complaints worked their way into Mr. Trump’s Twitter missives.

Since his election as president on Nov. 8, Mr. Trump has not taken China to task on Twitter very often. He’s just fired off nine times.

Full Donald Trump coverage: Galleries, news, video

But they’ve stung — in particular his defense of accepting a congratulatory call from the leader of China’s rival, Taiwan. Mr. Trump has also sharply criticized the PRC for inaction in dealing with provocative moves by North Korea.

In early January, China’s state-run news agency, Xinhua, lambasted President Trump’s “Twitter diplomacy” likening it to a “child’s game.”

RELATED: Night at Mar-a-Lago: Inside charity event with Trump, Sessions nearby

Here are Mr. Trump’s China tweets since his Nov. 8 election.

See which cell tower operator is laying off workers in Boca Raton

Landlord American Tower Corp. plans to lay off 58 workers at its Boca Raton office on May 1, the Boston-based company tells state officials.

In a letter to the state’s labor department, American Tower blames “changing business needs” and said it expects more layoffs in Boca later this year.

American Tower (NYSE: AMT), an owner of communications towers, operates a 22,000-square-foot office at Arvida Park of Commerce. Rival SBA Communications (Nasdaq: SBAC) runs a headquarters less than two miles north.

Palm Beach County’s unemployment rate jumps in January

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Palm Beach County’s jobless rate jumped in January as the ranks of the official work force swelled.

The county’s unemployment rate was 5.2 percent in January, Florida’s labor department said Monday. That’s up from 4.6 percent in December and 4.8 percent a year ago.

More than 721,000 Palm Beach County residents were counted in the county’s formal labor market in January, up from less than 700,000 in January 2016.

So even though more people are working, unemployment rose to its highest level since last summer.

Meanwhile, Palm Beach County’s 2.8 percent pace of job growth over the past year continued to trail the state’s growth rate of 3.2 percent, but by a narrower margin than in past months.

Palm Beach County’s tepid job growth translates to wage weakness

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Palm Beach County’s average weekly wage rose to $973 in the third quarter of 2016, a 5 percent increase from the third quarter of 2015, according to a survey released Tuesday by the U.S. Bureau of Labor Statistics.

Sounds good, right? Not exactly. The national average for wage growth was 5.4 percent. Palm Beach County rated a subpar 215th among the nation’s 345 largest counties.

Meanwhile, Palm Beach County, long the highest-wage county in Florida, has been surpassed by Hillsborough County and Miami-Dade County.

It’s unclear exactly why Palm Beach County wages have weakened. Employment growth is robust.

One possible explanation: Palm Beach County’s job growth lagged Florida’s for much of 2016.

 

Digital Domain plays part in fight over Enterprise Florida budget

The former Digital Domain headquarters in Port St. Lucie. Photo by Thomas Cordy/The Palm Beach Post
The former Digital Domain headquarters in Port St. Lucie. Photo by Thomas Cordy/The Palm Beach Post

Nearly five years after the dramatic implosion of Hollywood animation company Digital Domain, the company’s hefty state subsidies again are a matter of debate in Tallahassee.

The script this time: Gov. Rick Scott and House Speaker Richard Corcoran are battling over Enterprise Florida. Scott campaigned as the jobs governor and wants more money for tax breaks for employers. Corcoran considers jobs incentives a form of corporate welfare.

As he rallies Republicans in the Legislature to pull the plug on Enterprise Florida, Corcoran points to the cautionary tale of Digital Domain, the biggest flop in the history of Florida’s economic development subsidies.

The night before Corcoran introduced a bill to kill funding for jobs incentives, he summoned top GOP lawmakers to a gathering in Tallahassee. The “meeting featured a three-minute video on failed Enterprise Florida projects,” the Fort Myers News-Press reports. “It includes John Textor, the former CEO of Digital Domain, explaining why $20 million in taxpayers’ money and $50 million in local incentives could not prevent his company’s bankruptcy and the evaporation of 300 Port St. Lucie jobs.”

Technically, Enterprise Florida didn’t issue incentives to Digital Domain. Its $20 million state subsidy came directly from state lawmakers and then-Gov. Charlie Crist.

After Digital Domain failed in 2012, Enterprise Florida’s scrutiny of Digital Domain became a point of contention. Enterprise Florida insisted that it never approved incentives and said Digital Domain “circumvented the due diligence process,” a position echoed by Scott.

But Textor insisted Enterprise Florida approved, and in an interview in 2012, Charlie Crist said he recalled that Enterprise Florida had signed off.

Enterprise Florida indeed negotiated incentives with Textor but ultimately declined to approve them. Either way, Textor didn’t receive incentives through Enterprise Florida.

Undeterred, Textor turned to Plan B — a direct appeal to state lawmakers and the governor.

 

 

Related’s Perez to Trump: I’m not interested in building your wall

Ivanka and Donald Trump at a January 2007 event for the proposed Trump Tower Palm Beach condo on North Flagler Drive in West Palm Beach.
Ivanka and Donald Trump at a January 2007 event for the proposed Trump Tower Palm Beach condo on North Flagler Drive in West Palm Beach. Photo by Allen Eyestone.

President Donald Trump, seeking to find a builder for his proposed border wall between the United States and Mexico, is turning to old real estate friends for help.

Full Donald Trump coverage: Galleries, news, video

Among them: The Related Group’s Jorge Perez, who once partnered with Trump on a proposed West Palm Beach condo dubbed Trump Tower Palm Beach.

In a recent Wall Street Journal story, Perez said he received an email  from Trump with this message: “Any interest in building a 2,000 mile wall—30’ high—between U.S.A. and Mexico? Call me.”

“I told him I thought the wall was immoral and it wouldn’t achieve the goals he wanted to achieve,” Perez told the Journal. “Plus, I have lots of business in Mexico—I’d be finished here.”

During the real estate boom ten years ago, Related partnered with Trump to try to develop a 23-story, 150-unit condominium at 4308 N. Flagler Drive.

Originally called Icon Palm Beach, Perez changed the name to Trump Tower Palm Beach because the Trump name would be a lure for international buyers. “The Trump brand is so strong, it expands your universe of buyers,” Perez said.

... A model of the Trump Tower Palm Beach in the sales center. Real estate mogul Donald Trump unveiled his new condo project in partnership with the Related Group.
A model of the Trump Tower Palm Beach in the sales center. In 2007, Trump unveiled the condo project in partnership with the Related Group. Photo by Allen Eyestone.

Ten years ago, Trump Tower Palm Beach held a glitzy event to show off a model of the proposed luxury condo.

Attendees included real estate brokers, prospective buyers, city bigwigs and the media.

RELATED: A peek inside Donald Trump’s historic Palm Beach palace

As guests dined on sushi, the Trumps held court.

Present at the glamfest were Trump, his wife, Melania, and The Donald’s daughter, Ivanka.

Ivanka and Trump sat for television interviews and chatted with print reporters about the Intracoastal Waterway project.

Despite the hype (and the sushi), the project’s timing wasn’t great: The recession’s cold winds already were starting to blow as the demand for condominiums slowly sank, then cratered.

By October 2007, Trump acknowledged to this reporter that the real estate market was looking iffy.  “The market in West Palm Beach is not exactly great-looking,” Trump said. “We won’t go forward unless we see a robust market.”

When pressed for details about Trump Tower Palm Beach sales, Trump was vague: ” “We’ve done very well with pre-sales. We’ve had substantial sales,” he said. “There’s no reason to be specific.”

But a Related executive gave some hints in June 2007. At that point, less than half the project’s 150 units had sold (prices ranged from $900,000 to $2.4 million). Developers were shooting for at least 60 percent, or about 90 units, before starting construction. But that didn’t happen and the condo wasn’t built.

Now it’s a decade later and there’s a new real estate boom.

And Related Group still is building condos on Flagler Drive, but a little farther south, at the Rybovich Marina.

The company also built a number of apartments and condominiums in West Palm Beach’s downtown, including CityPlace South Tower, The Slade, The Prado and the Tower Condominium at CityPlace. The Related Group’s most recent Palm Beach County project is an apartment complex in Delray Beach.

 

Trump, SoftBank and OneWeb: 5 things to know

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President Donald Trump is slated to visit the Space Coast this weekend, home of an employer he has singled out for praise. OneWeb is a satellite company run by Stuart resident Greg Wyler.

Five things to know about the ambitious startup:

  1. Big backers. OneWeb’s investors include British billionaire Richard Branson and Japanese firm SoftBank.
  2. Hefty hiring plans. OneWeb itself expects peak employment of 1,200 employees, many of them at its new factory in Merritt Island. Add in employment from suppliers of solar panels and other equipment, and total employment related to the satellite system could reach 3,000, Wyler said.
  3. The business plan predates Trump. OneWeb committed to build an $85 million factory in Brevard County in 2015, well before Trump’s surprise victory in the Nov. 8 election. But in an interview on CNBC, Wyler said the “invigoration and excitement” created by Trump’s win emboldened SoftBank Chief Executive Masayoshi Son to place an even bigger bet on OneWeb
  4.  An altruistic pitch. Wyler says billions of people in the developing world have no Internet access – nor do millions of people in rural America. In a world where schooling, banking and economic opportunity increasingly exist online, people on the wrong side of the digital divide risk being left behind.
  5. A fleet of satellites. OneWeb aims to launch 900 satellites that will circle the earth, providing steady Internet access that allows people in remote areas to log on.

Cheap no more: Florida ranks as one of least affordable housing markets in Realtors’ new measure

money-house-ntIt’s no surprise that property is prohibitively priced in Hawaii and California, or that homes are very affordable in Indiana. But here’s a shocker, from a new affordability measure by the National Association of Realtors and Realtor.com: Florida no longer is a bastion of cheap housing.

In fact, Florida ranks as the nation’s sixth least-affordable market, behind only Hawaii, California, the District of Columbia, Montana and Oregon. By this reckoning — which attempts to correlate incomes with the supply of homes affordable to buyers in that income range — Florida is less affordable than New York, Massachusetts or Colorado.

Blame fierce competition for entry-level homes, which are in particularly short supply in regions such as Palm Beach County.

“Consistently strong job gains and a growing share of millennials entering their prime buying years is laying the foundation for robust buyer demand in 2017,” Realtor.com Chief Economist Jonathan Smoke said in a statement. “However, buyers with a lower maximum affordable price are seeing heavy competition for the fewer listings they can afford. At a time of higher borrowing costs, this situation could affect affordability even more as buyers battle for a smaller pool of homes and bid prices upward.”

Florida long has ranked high on affordability measures, thanks to home prices that are a fraction of those in San Francisco and Manhattan. But Florida incomes also skew low.

Texas, another state with seemingly cheap housing, also ranks as unaffordable in the new metric. It comes in as 13th least-affordable market.

The measure uses a not-especially-easy-to-understand scoring system. Scores range from Hawaii’s 0.52 to Indiana’s 1.23. Florida’s score is 0.71. The lower the score, the less affordable the state’s housing market. The national average was 0.92.

Florida would be relatively unscathed by trade war with Mexico, study finds

Donald Trump on Super Tuesday. (Allen Eyestone/The Palm Beach Post)
Donald Trump on Super Tuesday. (Allen Eyestone/The Palm Beach Post)

Amid President Donald Trump’s vows to build a border wall and tear down NAFTA, many are bracing for a trade war with Mexico.

How would Florida’s economy fare in that scenario? Comparatively well, according to an analysis by WalletHub. Its state-by-state ranking puts Florida at 36th among regional effects of trade disruptions, just behind Hawaii and just ahead of North Dakota.

Intriguingly, three states that helped sweep Trump into the White House stand to lose the most: Texas, Arizona and Michigan could see the biggest consequences from a shift in trade policy, WalletHub says.

Here’s how WalletHub ranks the states: