For developers and distribution firms, Palm Beach Park of Commerce long has generated mixed feelings.
Sure, the industrial property west of Jupiter Farms promised a relatively painless approval process for projects likely to raise objections further east. But Palm Beach Park of Commerce’s remote location, across the Beeline Highway from Pratt & Whitney’s engine-testing plant, felt far from civilization.
The perception of the park might be changing, however.
A recent flurry of activity at the Palm Beach Park of Commerce has brought new life — and it has inspired one land owner to propose something besides warehouses at the industrial park. S&K Worldwide Realty plans a fast-food restaurant and a 120-room hotel, with plans for an additional eatery or two.
“There is a lot more than meets the eye out here,” said Steve Garine, broker at S&K Worldwide Realty.
While S&K Worldwide Realty has yet to line up operators for the restaurant or hotel, Garine says demand for services is being driven by the nearby Pratt & Whitney campus and new occupants at the Palm Beach Park of Commerce. Perhaps best known as home of a 1 million-square-foot Walgreens distribution center, the industrial park is welcoming other companies.
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In one recent coup, water supplier Niagara opened a 408,000-square-foot distribution center at the park. In 2017, Niagara paid $7.9 million for a 41-acre parcel at the Park of Commerce.
On a recent weekday, trucks bearing the names of Costco and other retailers lined up at the warehouse’s docks. Garine said the distribution center is so technologically advanced that robots rather than humans load the 18-wheelers.
Niagara’s decision to build in northwestern Palm Beach County reflects a lack of industrial land in South Florida’s more bustling distribution hubs, said Christopher Thomson, Cushman & Wakefield’s executive director of industrial brokerage.
“When they were first looking, they only wanted to be in Miami-Dade County or Broward County,” Thomson said.
But the reality of steep prices and a lack of land in those areas soon set in, he said.
Palm Beach County also has a tight market for distribution and manufacturing space. The vacancy rate for warehouses and other types of industrial buildings in Palm Beach County was just 3.1 percent in mid-2018, down from 3.6 percent in mid-2017, according to Cushman & Wakefield.
In a tight market, Palm Beach Park of Commerce is attracting other companies, too. McLane Co., the Texas-based distribution giant owned by Warren Buffett, in 2015 paid $11 million for 72 acres at the Park of Commerce.
McLane landed $2.6 million in job-creation subsidies from the county and state, but it has yet to break ground on a distribution center. Garine said McLane still plans to move ahead with a warehouse as large as 600,000 square feet.
In perhaps the highest-profile deal at the Park of Commerce, the Kelly Slater Wave Co. in November paid $6.5 million for an 80-acre parcel at the north end of the property. Slater, the surf icon, is developing a wave pool with Palm Beach County billionaire Dirk Ziff, co-owner of the World Surf League.
Slater said last year that he expected construction to begin in 2018 and be completed in 2019, but so far the site remains untouched by bulldozers. However, the property’s owner in early September won Palm Beach County approval for a few minor changes to the plan.
Meanwhile, YTG, an Atlanta-based real estate company, plans to build 220,000 square feet of distribution space on land it owns at the park, said Thomson, YTG’s broker.
The fortunes of Palm Beach Park of Commerce long have run hot and cold.
In 2000, Walgreens announced it would build a massive distribution center at the property, a move that raised Palm Beach Park of Commerce’s profile as an engine for economic development.
Then, in 2003, the Scripps Research Institute considered the property for its Florida labs, and Palm Beach Park of Commerce seemed poised to become a hub of commercial activity.
While Scripps decided to set up shop east of Interstate 95 instead, Palm Beach Park of Commerce was firmly on the map in time for the real estate bubble. The property in 2007 fetched $162 million, an eye-popping sum paid by the California State Teachers Retirement System, the nation’s second-largest pension fund.
But CalSTRS did little to develop the industrial park, and the pension fund absorbed a huge loss when it sold in 2014. YTG in 2014 paid $30 million for 537 acres at Palm Beach Park of Commerce.
Now, though, the park is on an upswing again. Garine noted that development again is marching west, as illustrated by the incorporation of the town of Westlake on the site of the former Callery-Judge groves and the Arden development even farther to the west.
“The rest of the county is catching up with us,” Garine said.