A real estate analytical firm says that if the commercial real estate collapses, Palm Beach County would be the site of one of the worst disasters. But two factors could prevent that, says Ed Kearney, managing director of Kearney Commercial Realty/Sperry Van Ness.
A study of 2009 by Real Capital Analytics ranked Palm Beach County as the seventh nationally for distressed commercial real estate. The county had $2.3 billion in troubled commercial properties.
That was then. Now, health care reform is going to boost demand for medical services, says Kearney of Kearney Commercial Realty. Health care is already big business because one in five Palm Beach County residents is 65 years or older. Doctors stay busy treating maladies associated with aging in their office properties, many of them clustered around hospitals.
Physicians will get much busier, if government figures are correct. The U.S. Census Bureau said that nearly 28 percent of the Palm Beach County population under 65 did not have health insurance in 2007.
“With layoffs boosting the county unemployment rate to 12.4 percent in February 2010, it’s likely that a higher number of people lack health insurance,” says Kearney. “Regardless of what you think of the federal plan, as more people get medical coverage, doctors will have more patients. And that will boost demand for medical office space.”
The other sign of hope for commercial real estate is a plateau of downward economic trends in Palm Beach County, says Kearney of Sperry Van Ness. February’s unemployment rate, while high, was less than 12.5 percent in January 2010. And though new home starts may not recover for years, sales of existing homes have leveled off.
“The economy isn’t healthy, it’s just not as sick as it was a year or 18 months ago,” says Kearney, who has 25 years of experience in commercial real estate. “From here on, the key indicators to watch will be corporate and individuals bankruptcies. If those numbers trend down, then the Palm Beach County economy is on the mend.”
Kearney is not alone in his view. Hugh Kelly, a New York University real estate professor, told an audience in West Palm Beach on March 25, 2010, that reports of a commercial real estate apocalypse are overrated.
“I think forecasts of a crash are navigating out of a rear-view mirror of a recession that is over,” Kelly was quoted as saying by the Palm Beach Post. “Demand for use of commercial space remains weak and absorption is negative, but we’re growing in terms of consumption.”
About Edward Kearney and Sperry Van Ness
Edward Kearney is managing director of Kearney Commercial Realty Inc./Sperry Van Ness with an extensive background in various aspects of commercial real estate including investment analysis, landlord and tenant representation, and property tax abatement. SVN is a leading national brokerage firm that markets commercial real estate properties to an investment and brokerage community of more than 100,000. Kearney welcomes investors, brokers, and others with an interest in the Florida commercial real estate market to contact him today by calling 561-616-6262, or visiting http://www.svnpalmbeach.com for more information about the services he provides.
For more information about Edward Kearney and Kearney Commercial Realty Inc./Sperry Van Ness, please visit http://www.svnpalmbeach.com.