Related Cos. of New York City has decided to expand CityPlace, the mixed-use center in West Palm Beach that celebrated its 15th anniversary last month.
Related plans 300,000 square feet of Class B office space, likely in two buildings, and an apartment or condominium building with 300 units, Kenneth Himmel, CEO of Related Urban, told The Real Deal. The new projects would be built at parcels Related owns at the northern end of CityPlace — on both the east and west side of Rosemary Avenue between Evernia and Fern streets in West Palm Beach.
CityPlace includes 600,000 square feet of retail space; CityPlace Tower, an 18-story Class A office tower; an apartment building and condominiums.
So far, some local real estate pros say they are impressed with Related’s plans. “Part of what’s lacking is a connection of Clematis Street [downtown West Palm’s main thoroughfare] and CityPlace, said architect Rick Gonzalez, president of REG Architects of West Palm Beach, who helped design the restoration of CityPlace’s iconic Harriet Himmel Theatre. “This is a great reinforcement of that connection.”
Evernia Street, which would represent CityPlace’s northern boundary after the projects are completed, is situated two blocks from Clematis.
As for the decision to opt for Class B office space, experts say it makes sense given that the spot is outside the main downtown corridor and borders a gritty neighborhood. Himmel said the office space makes a lot of sense for the back offices of financial service firms, particularly money management firms based in Palm Beach and downtown West Palm.
William Cummings, a commercial real estate broker for Century 21 in West Palm Beach, notes that many young entrepreneurs prefer Class B space for its funky design. “They like that vibe,” he told TRD.
There’s also a price difference, of course. “We can offer $22 to $25 [per square foot] rent there, compared to rent of more than $50 per square foot in CityPlace Tower,” Himmel said. He said Related is in talks with a company to take 125,000 square feet of space, occupying all of one building. The second building would be 175,000 square feet, Himmel said. He expects most of the tenants to occupy 10,000 to 25,000 square feet.
With all the talk of the city’s need for more Class A office space, the need for Class B space has largely been ignored, Cummings said. “That can certainly be absorbed by the city,” he said.
On the residential side, Himmel is excited about the parcel’s proximity to West Palm’s Tri-Rail and All Aboard Florida train stations. “I think there will be reverse commuters,” people living in West Palm Beach and commuting south to Delray Beach, Fort Lauderdale, and beyond, he said.
Gonzalez agrees and hopes the apartments or condos will be affordable enough to allow all kinds of workers to live there. “It would have to be affordable, because it’s not an A location in terms of water views, but it has a high walkability index,” he said.