An affiliate of DiVosta Investments has filed an application to build a pair of 11-story office buildings and a three-story parking garage in Palm Beach Gardens, a development that will fill a void in the city, industry insiders say.
The project is planned for 3874 Kyoto Gardens Drive, just north of PGA Boulevard and just east of Alternate A1A. Each office building is slated for about 112,000 square feet and the garage for 714 spaces.
“With the explosive growth in Palm Beach Gardens and a fantastic location with visibility from I-95,” the project is a no-brainer, Rebel Cook, head of Rebel Cook Real Estate brokerage in Palm Beach Gardens, told The Real Deal.
Neil Merin, chairman of NAI Merin Hunter Codman, which brokered the sale of the land to DiVosta affiliate Gardens Corporate Center, notes that the property is “basically an outparcel” of the upscale Gardens Mall. “It’s walking distance from Whole Foods Market and the rest of Downtown at the Gardens,” another upscale mall, he told TRD.
Office space is tight in the Palm Beach Gardens market, with occupancy standing at about 90 percent, Peter Applefield, founding principal at Aurum Property Partners, a real estate management/investment company based in West Palm Beach, told TRD.
The developers hope to finish the buildings by 2017. The project represents the first new significant Class A office space in Palm Beach Gardens since at least 2001.
Office space is tight in the city for several reasons, industry insiders said. “Northern Palm Beach County has become the preferred suburban marketplace,” Merin said. Business owners and managers are moving from West Palm Beach to Palm Beach Gardens.
“People who did have their offices in West Palm Beach now want something closer to home,” he said. “Palm Beach Gardens, like Jupiter, is a very high-end master-planned community with tight control on development.”
Palm Beach Gardens has 2.5 million square feet of office space, compared to about 7 million for downtown West Palm Beach. “When people want space in the Gardens, it runs out quickly,” Merin pointed out.
Finally, “there’s the economic expansion,” he said. “That’s partly due to people relocating here and creating jobs. A lot of that is in the northern end of the county.”
Applefield said the owners may need to pre-lease half of the space before construction begins. But Merin said that’s not an issue, thanks to DiVosta’s deep pockets.
“It has the wherewithal to build and withstand the market and will build without pre-leasing,” he said. “Anyone who waits to build on PGA Boulevard — or in South Florida generally — until the buildings are 50-percent pre-leased will have ‘Coming Soon’ signs on their property for an awful long time.”